Five day streak of gains ends; Gentracks leads market lower

New Zealand shares snapped five days of gains, led lower by Gentrack as investors fretted over how the utilities software developer will cope with ongoing turmoil in Britain’s electricity market.

Monday, December 2nd 2019, 6:44PM

by BusinessDesk

The S&P/NZX 50 Index decreased 14.60 points, or 0.1 percent, to 11,301.98. Within the index, 26 stocks fell, 22 rose, and two were unchanged. Turnover $108 million.

Gentrack led the market lower, down 6.3 percent at $3.75, its lowest level since March 2017. The stock has slumped 27.2 percent since issuing its third profit warning on Nov. 21, and took another thumping today on news of a major restructuring plan at UK electricity supplier Npower, one of that nation’s big six retailers.

“Gentrack has really struggled. We’ve seen one of the top six energy retailers in discussions around winding up what’s called Npower,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. Npower owner E.ON has flagged plans to cut up to 4,500 jobs of its 5,700 staff in a restructuring plan to hand over millions of customers to E.ON UK, shrinking the big six to the big five.

“With what’s happening with energy retailers in the UK, more money’s being taken off the table” at Gentrack, he said.

Sky Network Television fell 2.4 percent t 83 cents after it confirmed it was considering selling its outside broadcasting business. The pay-TV operator’s new chief executive Martin Stewart has singled out online streaming and premium sports as areas for the company to focus on, and adjusted the business to align with that strategy.

Blue-chip stocks Meridian Energy, Kiwi Property Group, Spark New Zealand and Contact Energy were all weaker on volumes of more than a million shares.

Kiwi Property was the most traded stock on a volume of 2.2 million shares, falling 1.6 percent to $1.555. Meridian declined 1.6 percent to $4.63, Spark was down 1.3 percent at $4.48 and Contact Energy decreased 1 percent to $7.10.

Fletcher Building was also weaker, down 0.8 percent at $5.19 on a volume of 1.1 million shares, and Infratil dipped 0.2 percent to $4.89 with 1.2 million shares changing hands.

The NZX50 was one of the few major Asian benchmark indices to decline today, with most of the region buoyed by stronger than expected Chinese manufacturing indicators.

Exporter Sanford posted the day’s biggest gain, up 2.6 percent at $7.80 on an unusually small volume of 16,000 shares, compared to its 177,000 average.

Among other export-focused businesses to gain, Pushpay Holdings was up 1.3 percent at $3.86, A2 Milk rose 1.3 percent to $15.72, Synlait Milk advanced $1.1 percent to $9.40, and Fonterra Shareholders’ Fund units were up 0.5 percent at $4.02.

Mercury NZ rose 0.5 percent to $4.825 on a volume of 1.6 million shares. The electricity generator-retailer today said its BBB+ credit rating was affirmed by Standard & Poor's.

Outside the benchmark index, Serko slipped 0.2 percent to $4.99. The company today received a ‘please explain’ notice from the stock market operator as to why its share price had jumped 17.8 percent over a four-day period.

Smartpay climbed 11 percent to 50 cents, recovering some of Friday’s decline. The stock has more than doubled since the company last week announced the $70 million sale of its New Zealand business to Verifone.

Delegat Group was down 2.9 percent at $11 with just 1,757 shares traded, less than its typical 8,600 average. The winemaker is scheduled to hold its annual meeting in Auckland tomorrow.

Tags: Market Close