Fletcher Building pulls NZ market lower
New Zealand’s benchmark index fell almost 1% on the first day of market trading following the National party claiming victory at the 2023 election on Saturday night.
Monday, October 16th 2023, 6:14PM
by BusinessDesk
The S&P/NZX 50 Index fell 80.6 points, or 0.72%, to 11,185.08. Turnover was $80.3 million. There were 48 gainers and 81 decliners on the main board.
Peter McIntyre at Craigs Investment Partners said the market hadn’t experienced the jump that investors thought might happen after the change in government – but the leadership change would be working its way through the market over the next couple of weeks.
Fletcher Building resumed trading on Monday after going into a trading halt last Wednesday following claims made by Australian firm BGC that pipe problems from Fletcher’s subsidiary Iplex would cost it A$1.8 billion (NZ$1.9b).
“This is not a $1.8 billion problem," Fletcher’s chief executive Ross Taylor said on Friday in a presentation disputing BGC’s claims.
Fletcher fell more than 13% after the market opened on Monday and ended the day down 57 cents or 11.6% to $4.33.
McIntyre said the stock had gathered more strength after the Aussie market opened in the afternoon.
The shares traded over $16.2m in value on the NZX over the day.
In other news, SkyCity Entertainment told the market that its chief executive, Michael Ahearne, will leave the company at the end of March 2024. Ahearne joined the company in Dec 2017 as its group chief operating officer and was appointed chief executive in Nov 2020.
The casino operator was down 5 cents or 2.5% to $1.95 by early evening.
Tower was up 3 cents or 4.9% to 64.5 cents after the insurer revised its net profit after tax guidance.
It now expects a net profit of between $7m and $10m – including large events – which is up from its previous range of between a loss of $2m and a profit of $3m.
McIntyre said the update was positive.
“Insurance companies have actually performed well because of the higher interest rates,” he said. “They're able to earn more off their cash than what they ever have before in the last 10 or 15 years.”
Apple grower Scales Corp was up 10 cents or 3.2% to $3.19, and Channel Infrastructure was up 3 cents or 2% to $1.50.
Auckland International Airport, which holds its annual meeting on Tuesday, ended the day up 5.5 cents or 0.7% to $7.92. The dual-listed airport told the market on Monday that it's considering an offer of fixed-rate bonds maturing in November 2029 to New Zealand retail and institutional investors.
Tourism operator Tourism Holdings, which holds its annual meeting later this week as well, was down 11 cents or 3.1% to $3.49.
Dairy stocks were also down; Synlait Milk fell 5 cents or 3.6% to $1.35, and A2 Milk edged down 4 cents or 0.9% to $4.51. Fonterra Shareholders' Fund Units were down 1 cent or 0.3% to $3.08. The next global dairy trade auction is this week.
The NZ dollar was trading at 59.06 US cents at 3pm in Wellington, down from 59.27 on Friday. The trade-weighted index was at 70.34, from 70.50 on Friday.
| « NZ market dips as election looms | NZ market lifts after surprise CPI data » |
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