MARKET CLOSE:NZ shares fall; Genesis, Merdian drop as investors book gains

New Zealand shares fell, snapping four days of gains, led by Genesis Energy, Meridian Energy and MightyRiverPower as investors looked to crystalise gains in the energy companies. Kiwi Income Property Trust, DNZ Property Fund and Goodman Property Trust gained after posting earnings.

The NZX 50 Index fell 2.904 points, or 0.1 percent, to 5487.887. Within the index stocks were mixed as 15 stocks fell, 24 rose and 11 were unchanged. Turnover was $152 million.

So-called gentailers, which are favoured for their dividend yield, have climbed steadily in the lead up to and post the general election, which saw the incumbent National government return for a third term and removed the risk of any further regulation to push down retail electricity prices which was a central policy plank of the opposition parties. The NZX Energy Index, which is made up of the partially-privatised power retailers and generators as well as Z Energy and minnow NZ Windfarms, has climbed 29 percent over the past 120 days.

Investors sold the stocks to book profit from the gains. Genesis, the last of the government's energy assets to be partially-privatised, led the benchmark index lower, falling 2.7 percent to $2.13. Meridian dropped 2.5 percent to $1.73 and MRP declined 0.5 percent to $3.115. Contact Energy fell 1.4 percent to $6.37.

""The electricity stocks appear to have finally reach some kind of sort level - they have been on an absolute tear," said Matthew Goodson, managing director of Salt Funds Management. "It feels as though, at least today, a reasonable amount of selling has come out in response to the very sharp price moves."

Spark New Zealand, formerly Telecom Corp, slipped 0.2 percent to $3.24. Fletcher Building, New Zealand's largest listed company, fell 1.4 percent to $8.45.

DNZ Property Fund advanced 2 percent to $1.80 after it posted a 41 percent gain in first-half profit to $25.98 million after recognising an increase in the value of its portfolio and trimming corporate and finance costs.

"DNZ saw their core property portfolio performing strongly as you'd expect in what is a very strong property market for now," Goodson said.

Kiwi Income, the country's second-largest property trust by market capitalisation, climbed 1.7 percent to $1.22 after it reported a 12.3 percent lift in first-half operating earnings to $42.1 million as it saved on external management fees and achieved rental growth from Sylvia Park.

Goodman Property Trust, New Zealand's largest listed property investor by market capitalisation, rose 0.5 percent to $1.11 after it reported an 8 percent drop in first-half profit to $60.2 million in the six months ended Sept. 30, as a decrease in the value of its interest rate swaps offset a lift in rental income. Last week it announced a joint venture with Singapore's sovereign wealth investor, GIC, for its $313 million Viaduct Quarter development on Auckland's Waterfront, which was criticised for being under book value.

"It was fairly clear in the Goodman result there was still some "good news"-ment to describe their partial sale of assets to GIC, at book value when the market is trading well above that," Goodson said. "But the result itself was ok."

Infratil was unchanged at $3.09, after Wellington International Airport, which it owns two-thirds of, reported a 4.8 percent drop in first half earnings to $40.4 million. The infrastructure investors till drew out a $38.2 million payment from the airport, up from $35.3 million a year earlier.

Fonterra Shareholders' Fund rose 0.5 percent to $6.13. Fonterra Cooperative Group chairman John Wilson has affirmed the world's biggest dairy exporter plans to pay its farmers $5.30 per kilogram of milk solids for the 2015 season. Units in the fund give holders access to the cooperative's dividend stream. Synlait Milk fell 0.8 percent to $3.60 on news of the dairy price. The dairy processor, which counts China's Bright Dairy as a cornerstone shareholders, buys milk from Fonterra.

"It's not good news for others such as Synlait, if indeed that is the final payout ratio," Goodson said. "It has to pay a higher price for its input relative to the prices its getting to its output."

Outside the benchmark index, Comvita fell 1.4 percent to $4.10 after the company, which makes health products derived from manuka honey, widened its first-half loss to $3.3 million and detailed plans to raise $24.4 million from shareholders.

Smiths City Group fell 1.8 percent to 54 cents after the Christchurch-based retail chain said it is looking for a new chief executive after long-serving head Rick Hellings said he plans to leave after three decades with the company.

Pyne Gould Corp was unchanged at 39.5 cents. The Gurnsey-based company which is controlled by managing director George Kerr was censured and fined $8,000, plus tribunal costs of $3,200, by the stock exchange disciplinary body for breaching corporate governance rules by failing to notify the exchange or seek an exemption in a timely manner.

On the NZ Alternative Index, TruScreen, which develops a cervical cancer screening system, debuted in a compliance listing, rising 40 percent from its recent issue price to 14 cents.

BurgerFuel Worldwide fell 5.7 percent to $3.30 after the fast food chain more than doubled first-half earnings to $213,000 as it opened seven new stores in the period, lifting sales but flagged a further rise in expenses as it chases international growth.

Just Water International dropped 4.5 percent to 14.8 cents. Yesterday, independent directors recommended shareholders accept founder and majority investor Tony Falkenstein's 15 cents per share takeover bid for 29.3 percent of the water cooler and supplies group he doesnt own.