New Zealand shares edged lower in subdued trading as fears over the country’s trade relations with China unnerved investors. Property For Industry fell after its earnings missed expectations, while Port of Tauranga hit a new record when upgrading its annual earnings guidance.

The S&P/NZX 50 index decreased 0.21 points, or 0.002 percent, to 9,245.44. Within the index, 29 stocks fell, 16 gained, and five were unchanged. Turnover was $89.8 million, with just five companies trading on volumes of more than a million shares. 

New Zealand’s benchmark index was one of the few to decline across Asia, with most markets buoyed by the progress made in the US-China trade talks. New Zealand’s own relationship with China took centre-stage after reports last week that primary goods exporters were facing issues clearing customs and that tourists were being discouraged from visiting New Zealand. 

Prime Minister Jacinda Ardern played down those concerns at her weekly post-Cabinet press conference, saying the two nations’ relationship was significant and complex and brings great benefits to both parties.

Greg Smith, head of research at Fat Prophets, said New Zealand is more heavily reliant on China as a trading partner than the US, and as a much smaller nation can’t throw its weight around as easily. 

“We’ve got to tread carefully given we’ve got so much to lose,” he said. 

A key bone of contention between the nations was the Government Communications Security Bureau’s rejection of Huawei Technologies’ equipment for Spark New Zealand’s planned 5G mobile network. The UK government has reportedly found a way to mitigate the risk from using Huawei kit, and Spark has said it’s hopeful of using its existing partner’s technology. 

Spark slipped 0.1 percent to $4.06 on volume of 2.3 million shares, the most heavily traded stock on the day. Of other stocks trading on volumes of more than one million shares, Trade Me dipped 0.2 percent to $6.38, Goodman Property Trust slipped 0.6 percent to $1.64, and Mercury NZ declined 0.8 percent to $3.75. 

A2 Milk, which has relied on rapid growth in China to become New Zealand’s biggest listed company, rose 3.6 percent to $13.16 on a volume of 1.2 million. That was the biggest gain on the NZX 50. Fruit exporter Scales Corp gained 2.8 percent to $4.73 on a volume of 430,000 – its three-month average is 61,000. 

Sky Network Television led the local market lower, down 3.3 percent at $1.77 on a volume of 417,000, near its 90-day average of 477,000. 

Sanford, which complained of salmon getting held up at China’s border last week, fell 2.8 percent to $6.70 on typically light volumes of 67,000. 

Property For Industry was down 0.8 percent at $1.915 on slightly busier volume than usual of 280,000. The industrial property investor reported flat underlying earnings today, missing analysts’ expectations as a lower-than-usual occupancy rate and increased property costs crimped its net rental income. 

Other property investors were also weaker. Kiwi Property Group fell 2.4 percent to $1.405, Argosy Property was down 2 percent at $1.22, Stride Property declined 1 percent to $1.96 and Precinct Properties New Zealand decreased 0.3 percent to $1.535. 

Port of Tauranga traded at a record $5.45, ending the day up 0.4 percent at $5.25. The port operator reported a 4 percent increase in first-half profit and said annual earnings will be at the top end of guidance on rising cargo volumes. That was boosted in part by congestion on rival Ports of Auckland’s wharves. 

Outside the benchmark index, Steel & Tube Holdings rose 0.8 percent to $1.23 after reporting a 49 percent increase in first-half profit, and said it will resume paying dividends with an interim payment of 3.5 cents per share. 

Of companies reporting tomorrow, Heartland Group gained 2.3 percent to $1.34 and NZME rose 6 percent to 53 cents. 

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