Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

MARKET CLOSE: NZ shares down: Kathmandu, Contact drop

MARKET CLOSE: NZ shares down: Kathmandu, Contact drop while Fletcher, CBL remain halted

By Sophie Boot

Feb. 12 (BusinessDesk) - New Zealand shares dropped, led by Kathmandu Holdings and Fisher & Paykel Healthcare, while NZX gained.

The S&P/NZX50 Index fell 33.31 points, or 0.4 percent, to 8,059.06. Within the index, 26 stocks fell, 17 rose and 7 were unchanged. Turnover was $151 million.

"There's a bit more of an offer tone to the market today, despite that very sharp turnaround Friday night our time in the US," said Matt Goodson, managing director at Salt Funds Management. "They're not dramatic movements, but quite a number of names are down about 1 percent."

The market was expecting an announcement from Fletcher Building this morning increasing the losses at its building and interiors (B+I) unit. The company was set to come out of the trading halt it was placed in last week at $7.77, but instead has extended the halt until Wednesday, saying it has yet to complete a review of key projects and has begun talks with lenders about breaching covenants.

Fletcher said the trading halt would lift before the start of trading on Wednesday, "prior to which it will provide to the market an update of its review and the status of its discussions with its lenders."

"There's two possible thoughts there - one is that they're still finalising extent of the losses from the construction division, and the other is that they do have quite a complex debt structure, a mix of bank debt, US private placements, capital notes, so it is possible that getting everyone on the same page is not a simple exercise," Goodson said. "The nature of the covenants means the breach is most likely confined to the 2018 year, but there will certainly be a lot of focus on 2019 and onwards as well. We still don't know if it's merely a breach which incurs some penalties or whether some form of equity raising is required."

Goodson said that while selling assets was a possibility for Fletcher, that sale process would take time and wouldn't have certain outcomes unless something was already well-advanced.

CBL Corp also remained in a trading halt at $3.17. The insurer says it hasn't worked out how much capital it needs to raise to satisfy regulatory solvency concerns and may take "a number of weeks" to finalise any transaction.

The stock was suspended from trading on the NZX last week as stock market operator NZX tries to work out whether CBL has kept the market informed of material information and met continuous disclosure obligations.

Kathmandu Holdings led the index lower, down 2.1 percent to $2.30, with Fisher & Paykel Healthcare down 2.1 percent to $12.45 and Ryman Healthcare dropping 1.9 percent to $10.50.

Contact Energy dropped 0.4 percent to $5.32. It first-half adjusted earnings fell 11 percent to $236 million as the electricity generator-retailer dealt with a dry spell which sapped its hydro generation in what it described as a "highly competitive" market. Net profit sank 40 percent to $58 million, or 8.1 cents per share, which it said was due to a greater reliance on thermal power supply. Revenue rose 15 percent to $1.19 billion.

"It was in line with diminished expectations," Goodson said. "They were suffering from poor hydrology in the half, since then it has rained and the Clutha has filled up for them. Importantly, they have made good progress taking core costs out of the business, which is a repeatable source of upside."

NZX was the best performer, up 2.7 percent to $1.13. A report by the New Zealand Institute of Economic Research, commissioned by the stock market operator, says NZX's role in keeping the cost of capital relatively low gives a $2.4 billion kicker to the broader economy.

Property For Industry gained 0.6 percent to $1.65. Its annual profit more than halved to $51.7 million as it bore the cost of buying out its management contract and reaped a smaller fair value gain on investment properties.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Te Kuha: Govt Declines Application To Mine Conservation Land

An application to mine coal on public conservation land near Te Kuha in the Buller District has been declined, Minister of Conservation Eugenie Sage and Minister of Energy Resources Megan Woods announced today. More>>

ALSO:

Fieldays: Deer Milk Wins Innovation Award

Pāmu’s (formerly Landcorp) focus on innovation in the food business has been recognised at the 50th Fieldays, winning the Innovation Grassroots awards, with its ground-breaking deer milk product. More>>

ALSO:

Milking It: Regulator Concerned At Fonterra's Price Calculations

The Commerce Commission says it is concerned that the 'asset beta' Fonterra Cooperative Group uses to determine the farmgate milk price is too low, meaning it ends up paying its farmers a higher price for their milk than would be warranted under the company's enabling law. More>>

ALSO:

Antarctica: Waves Trigger Ice Shelf Collapse

Ocean waves following sea ice loss trigger Antarctic ice shelf collapse Storm-driven ocean swells have triggered the catastrophic disintegration of Antarctic ice shelves in recent decades, according to new research published in Nature. More>>

ALSO:

Housing: National Affordability Worsens

The major change that can be seen in the most recent data is worsening affordability for first-home buyers at that national level, driven by higher house prices in Auckland, Wellington, Christchurch, Hamilton and Tauranga. More>>

ALSO:

Avocados Are Toast: Prices Smash Records

Avocado prices rose 37 percent in May to record levels after a small harvest, Stats NZ said today. However, prices fell for other fruit and vegetables, such as mandarins and broccoli. More>>

ALSO: