Article – BusinessDesk
Dec. 18 (BusinessDesk) New Zealand shares fell as the kiwi dollar held near a five-year high against its Australian counterpart, weighing on companies with operations across the Tasman including Fletcher Building and Ebos Group.
MARKET CLOSE: NZ shares drop; Fletcher, Ebos down on Australian exposure
Dec. 18 (BusinessDesk) – New Zealand shares fell as the kiwi dollar held near a five-year high against its Australian counterpart, weighing on companies with operations across the Tasman including Fletcher Building and Ebos Group.
The NZX 50 Index fell 52.141 points, or 1.1 percent, to 4675.878. Within the index, 38 stocks fell, six gained and six were unchanged. Turnover was $115 million.
The New Zealand dollar made a new five-year high, reaching about 93 Australian cents, and creating headwinds for businesses bringing home revenue from Australia. The local economy is growing at a faster clip than Australia’s, putting New Zealand ahead in terms of the timing of rate hikes and underpinning the kiwi.
Fletcher, which has about 50 percent of its operations in Australia, dropped 2.2 percent to $8.35. Ebos Group, which this year made its biggest ever acquisition in Australia, fell 2.3 percent to $8.80.
“The strength in the kiwi dollar against the Australian dollar is starting to play on these companies,” said Grant Williamson, a director at Hamilton Hindin Greene. “We think the kiwi dollar will remain strong.”
Chorus dropped 4.7 percent to $1.43, leading the index lower. The network operator has fallen from as high as $3.08 in early August on concern regulated price cuts will weaken its balance sheet, force it to stop dividend payments and cut costs.
Summerset Group gained 1.3 percent, leading gainers, after the retirement village operator and developer bought two blocks in Christchurch. The company plan to develop two new villages in the country’s second biggest city, spending some $200 million. Rivals Metlifecare and Ryman Healthcare fell 1 percent to $3.97 and 1.4 percent to $7.78 respectively.
Kathmandu gained 0.6 percent to $3.33 after a substantial shareholder notice showed Fisher Funds Management slipped below the 5 percent threshold after a series of transactions since late October.
Hallenstein Glasson fell 1.4 percent to $3.65 after the clothing chain appointed Tracy Shaw as its new boss of the Glassons stores. Shaw was most recently general manager at Jag in Melbourne.
MightyRiverPower dropped 1.5 percent to $2.03 after the state-controlled power company appointed outgoing Transpower boss Patrick Strange as a new director. Meridian Energy slipped 0.5 percent to 99.5 cents.
Dual-listed Australia & New Zealand Banking Group fell 1.1 percent to $32.80 on the NZX after the lender named David Gonski to succeed John Morschel as chairman. Gonski currently chairs Coca-Cola Amatil. Rival Westpac Banking Corp declined 0.5 percent to $33.13, while financial services firm AMP sank 2.8 percent to $4.54.