Chorus rout extends NZX50 losses

JASON KRUPP
Last updated 12:37 07/05/2012

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The New Zealand share market extended its losses in morning trade, led by a rout in Chorus amid speculation pricing changes could stifle demand for fibre broadband and nervous trading due to offshore volatility.

The NZX 50 Index fell 10.81 points, or 0.30 per cent, to 3538.95 as at noon.

The New Zealand dollar recently traded at US79.23 cents, down from US79.36c at 8am, and US80c at 5pm on Friday.

Regional markets appeared to be taking their leads from offshore, where nervousness around political changeovers in France and Greece saw major equity markets close in the red.

Across the Tasman, Australia's S&P/ASX 200 Index opened 0.5 per cent lower at 4375.4, with the negatively likely to spread once Japanese and Asian bourses open.

Chorus, the telephone network company, fell 3.7 per cent to a three-month low of $3.13, after the Commerce Commission announced it was looking to drop the price the company can charge competitors to access its copper network by $4.71 to $19.75 a month over a two year period.

The stock was one of the most traded securities on the market, with 1.4 million shares changing hands in the first half of the day.

Fisher & Paykel Appliances, the whiteware maker and exporter, fell 2.9 per cent to 51c.

Brokerage Forsyth Barr estimates the stock is trading at a 40 per cent discount to its valuation, and rates it as a "buy".

Metlifecare, the retirement village operator, fell 6.8 per cent to $2.05 after it issued 51.5 million shares to pay for its acquisition of Vision Senior Living and Private Life Care in an all-scrip offer.

The acquisition, if approved by the Overseas Investment Office and shareholders, will see the company become New Zealand biggest private retirement village operator by unit count.

Heartland New Zealand, the would-be bank, fell 1.8 per cent to 56c, as investors appeared to book profits following its surge last to almost 60c last week.

Fletcher Building fell 0.3 per cent to $6.26. Telecom rose 1.4 per cent to $2.57.

NZX, the securities market operator, rose 1.8 per cent to $2.90, leading gainers at midday. The stock is rated as hold, according to a Reuters consensus poll of three analysts, with a median target price of $2.84.

Local property stocks, known for their defensive profile, were the main feature of buy-side activity on the market today, with Kiwi Income Property Trust, the country's biggest listed real estate investor, gaining 0.9 per cent to $1.08.

Argosy Property, the recently corporatised real estate investor, rose 0.6 per cent to 85c.

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Property for Industry, the commercial and industrial property investor, was unchanged at 1.17 after it reported an 8 per cent drop in first quarter distributable profit to $3.57 million.

- © Fairfax NZ News

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