CORRECT: MARKET CLOSE: NZ shares join selloff

Article – BusinessDesk

Sept. 30 (BusinessDesk) New Zealand shares fell, paced by Telecom and MightyRiverPower, ahead of a possible US budget stalemate and as the government scheduled a referendum on state asset sales for after the selldown of Meridian Energy that went on sale …

CORRECT: MARKET CLOSE: NZ shares join selloff

(corrects reference in opening para to replace ‘moratorium’ with ‘referendum’)

Sept. 30 (BusinessDesk) – New Zealand shares fell, paced by Telecom and MightyRiverPower, ahead of a possible US budget stalemate and as the government scheduled a referendum on state asset sales for after the selldown of Meridian Energy that went on sale today.

The NZX 50 Index fell 46.292 points, or about 1 percent, to 4736.387. Within the index, 37 stocks fell, four rose and nine were unchanged. Turnover of $242 million was swelled by the sale to institutions of Guinness Peat Group’s 33.6 percent stake in Tower.

Equity markets fell across Asia on concern a prolonged US budget impasse could slow the world’s largest economy. Getting accord on the budget by the Oct. 1 deadline is only the first leg of the challenge in Washington, with a deadline looming to lift the US$16.7 trillion debt ceiling or face possible default on debt payments.

“There’s a little bit of risk off appetite. It’s basically everywhere,” said James Lee, head of institutional equities at First NZ Capital. “Asian markets are weakening in the expectation of a weak open” in the US, where the working week is only just starting.

Telecom led the decline among New Zealand bluechips, falling 1.9 percent to $2.325. Auckland International Airport fell 1.6 percent to $3.315 and Fletcher Building dropped 1.5 percent to $9.50.

MightyRiverPower fell 1.3 percent to $2.27, or 23 cents below its sale price in the government’s selldown in May as the offer opened on shares of its bigger state-owned competitor, Meridian. Contact Energy declined 1.1 percent to $5.41.

Close to half the offer is already committed to New Zealand retail investors, based on bids submitted for shares last week from local share brokers, who had gone to their client bases to assess demand.

“New Zealand share brokers have already committed to buy 565 million shares,” representing 45 percent of the offer in total, Finance and State-Owned Enterprises Ministers Bill English and Tony Ryall said in a statement.

Separately, Prime Minister John Key said a Citizens Initiated Referendum on the sale of Meridian, MightyRiverPower, Genesis Power, Solid Energy and Air New Zealand will take place in late November and early December this year. Air NZ gained 0.3 percent to $1.515.

Tower, the general insurer, was unchanged at $1.80 after First NZ Capital managed the sale of GPG’s one-third stake mostly to institutional investors at $1.70 apiece. GPG was unchanged at 57 cents.

Warehouse Group led a decline among some retailers, falling 2.9 percent to $3.66. Kathmandu dropped 1.5 percent to $3.30 and Hallenstein Glasson Holdings fell 1.4 percent to $4.82. Restaurant Brands fell 1.4 percent to $2.84 while Pumpkin Patch gained 2.9 percent to $1.08.

Sky Network Television fell 1.2 percent to $5.82 and SkyCity Entertainment Group fell 0.7 percent to $4.01.

(BusinessDesk)

Content Sourced from scoop.co.nz
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