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Shares falls as Brexit vote causes concern

NZ NewswireNZ Newswire 17/06/2016
© Bloomberg

New Zealand shares slid as investors remain concerned the UK may vote to leave the European Union next week, potentially prompting other countries to leave the alliance and causing market turmoil.

The S&P/NZX 50 Index shed 41.51 points, or 0.6 per cent, to 6,847.06. Within the index, 30 stocks fell, 16 rose and four were unchanged. Turnover was $281.6 million.

The country's benchmark index is heading for a second weekly decline, falling from record high levels, as investors favour safe haven assets such as bonds and gold due to fears that British voters may opt to leave the EU in the June 23 referendum as polls show sentiment moving towards the 'leave' camp. Still, the killing of British MP Jo Cox on Thursday was seen by some as lessening the chances of the so-called Brexit.

"Markets are not quite sure whether to go up or down at the moment as investors try to weigh the odds of Brexit occurring," said Matthew Goodson, managing director of Salt Funds Management. "Between now and Brexit vote day, I think we are going to trade in a little bit of an aimless and slightly fearful pattern."

Goodson said in the short term, Brexit could cause a significant disruption to financial markets, partly due to the event itself and partly because investors are fearful poor performing economies such as Italy and Spain may also choose to exit the EU.

Property stocks, which are normally favoured for their yield appeal, fell as investors sell down some of their holdings to fund new investment in Stride Property's spin off and equity raise. Stride announced today that it would bring forward its bookbuild with selected institutions and NZX firms for its Investore Property unit to June 21.

Property For Industry dropped 4.7 per cent to $1.52, Argosy Property dropped 2.6 per cent to $1.12, Precinct Properties slid 1.2 per cent to $1.235, and Stride slid 0.9 per cent to $2.28. Goodman Property Trust gained 0.8 per cent to $1.285.

Auckland International Airport gained 0.6 per cent to $6.50.

Trilogy International closed unchanged at $4 after resuming trading on Friday, having been halted for a share sale at $3.70 apiece, a 7.5 per cent discount.

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