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NZ shares fall led by Air NZ

NZ NewswireNZ Newswire 4/05/2016 Sophie Boot

NZ shares fall led by Air NZ © Brendon O'Hagan/Bloomberg NZ shares fall led by Air NZ New Zealand shares fell, failing to maintain Tuesday's gains as Air New Zealand, Xero and Skellerup dropped though Sky Network Television gained.

The S&P/NZX 50 Index dropped 18.5 points, or 0.3 per cent, to 6,824.49. Within the index, 28 stocks fell, 17 rose and four were unchanged. Turnover was $177.3 million.

Air New Zealand fell furthest, down 5.4 per cent to $2.47. It had gained 4 per cent on Tuesday after releasing a presentation for an investor briefing indicating 2017 earnings won't match the $800m it has forecast for 2016, as it faces increased competition and gets less benefit from foreign exchange hedging.

"The guidance they gave yesterday was largely as per their existing forecast, but the thing about Air New Zealand is there's so much operational and financial leverage in an airline that very small changes can lead to very big differences in earnings," said Matt Goodson, managing director at Salt Funds Management.

"It's one which does trade in a volatile fashion."

Xero dipped 3.5 per cent to $15.49, a one-month low.

"The plethora of minor tinkering with various tax rates in Australia yesterday is actually very positive for MYOB and Xero, because it makes people's old installed software out of date and perhaps acts as a spur for them to upgrade to the more expensive monthly payment model," Mr Goodson said.

Skellerup Holdings fell 2.3 per cent to $1.27 and Port of Tauranga dropped 1.9 per cent to $18.55.

Orion Health Group was the biggest gainer, up 2.9 per cent to $4.29, and Metlifecare rose 2.1 per cent to $5.32.

Sky Network Television advanced 1.8 per cent to $5.55, a nine-month high.

The stock fell as low as $4.12 earlier in the year amidst concerns about competitors such as Netflix and Lightbox, but has recovered steadily since mid-April and is up 18.7 per cent for the year.

"It has continued a very strong run, fundamentally nothing's changed since the share price was down," Mr Goodson said. "Those worries remain but there's a lot of anticipation being built in ahead of their capital review."

Fletcher Building rose 1.2 per cent to $8.36.

Outside the main index, Tegel Group gained 3.1 per cent to $1.68. It closed at $1.63 on its debut on Tuesday, a 5.2 per cent gain on its initial public offering price of $1.55. Some 29 million shares in the poultry group changed hands.

IkeGPS rose 29 per cent to 85 cents after the company said it expects to reach cash breakeven in 2017 on improved sales from its new cloud-based product and was investigating a NASDAQ listing.

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