MARKET CLOSE: NZ shares fall as Sky TV farewells shareholder

By Jonathan Underhill

Nov 2 (BusinessDesk) – New Zealand shares fell, led by Sky Network Television after one of its oldest supporters exited its 11 percent stake. Infratil fell after the Commerce Commission questioned the profit made by Wellington International Airport and Tower rose after selling its medical business.

The NZX 50 Index fell 17.80 points, or 0.5 percent, to 3914.07. Within the index, 25 stocks fell, 13 rose and 12 were unchanged. Turnover was $325 million, the busiest day this year, reflecting the sale of Todd Capital’s Sky TV stake.

Sky TV, the nation’s dominant pay-TV operator, fell 4.9 percent to $5.10. Todd Communications, part of the privately owned Todd Corp, agreed to sell its 11.1 percent stake in Sky for $218 million, ending a 22-year tie up. Todd sold the 43.2 million shares at $5.05 apiece, a 5.8 percent discount to their trading price yesterday.

“Sky has under-performed – the market has been concerned with their growth profile,” said James Lindsay, equities manager at Tyndall Investment Management. Todd’s holding “is a very chunky stake.” Investors are also pondering the threat from internet based rivals such as Netflix, he said.

Infratil declined 1.8 percent to $2.20. Wellington International Airport, which is co-owned by Wellington City Council and Infratil, has “excessive” earnings targets that aren’t being pulled down by stricter disclosure rules, according to the Commerce Commission.

“It is a reasonable sized asset for Infratil and the value of the airport has been hit slightly,” Lindsay said.

Auckland International Airport, New Zealand’s biggest gateway, fell 1.5 percent to $2.64.

Tower, the insurance and wealth management company, rose 1 percent to $1.95 after announcing it had agreed to sell Tower Medical Insurance to ASX-listed nib holdings for about $102 million and plans to return the capital to shareholders. Tower Medical has a market share of about 13 percent and competes with Southern Cross.

The unit “was probably sub-scale” for Tower and it was seen as one of the harder units for it to sell, Lindsay said.

Among smaller stocks, Lyttelton Port Co fell 4.6 percent to $2.10 after the company told shareholders that it sees 2013 annual profit falling by as much as 23 percent as it moves outside its indemnity period for cruise revenue and on smaller volumes of coal exports.

Wellington Drive Technologies, the unprofitable maker of efficient electric motors, tumbled 15 percent to 16.6 cents after it posted a 23 percent slump in third-quarter sales after switching its focus this year to commercial refrigeration markets. It doesn’t see much good news on the horizon.

Sales fell to $6.6 million in the three months ended Sept. 30 from $8.8 million in the same period a year earlier, the Auckland-based company said in a statement.

TeamTalk, the owner of the CityLink fibre-optic broadband service, fell 0.4 percent to $2.61 after saying it wants to buy rural telecommunications provider Farmside Group for up to $42.1 million as it looks to grow its footprint beyond urban areas.

(BusinessDesk)

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