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


MARKET CLOSE: NZ shares down, Fletcher drops below $7.50

MARKET CLOSE: NZ shares down, Fletcher drops below $7.50 with ANZ, Synlait falling

By Sophie Boot

Oct. 26 (BusinessDesk) - New Zealand shares fell, dragged lower by Fletcher Building with weakness from Australia & New Zealand Banking Group after its earnings worried investors.

The S&P/NZX50 Index dropped 35.93 points, or 0.4 percent, to 8,806.74. Within the index, 27 stocks fell, 13 rose and 10 were unchanged. Turnover was $199 million.

"There's still a bit of uncertainty around the new government weighing on investors minds somewhat," Grant Williamson, director at Hamilton Hindin Greene said. "Offshore markets are also weaker, which is flowing through to us."

Fletcher Building was the worst performer again, down 2.7 percent to $7.46. Yesterday, it announced it has taken a further $125 million provision against problematic construction contracts including the convention centre and the justice precinct in Christchurch, and said its B&I unit would report a full-year loss of $160 million, including $35 million of overhead costs.

"They're back down to support levels around $7.50, there's a fair degree of selling in the stock today," Williamson said. "There have been a number of research notes put out which have had the target price anywhere from under $7 to over $8, there are pretty mixed views about it. It has let the market down a number of times now, and normally the market only allows companies a couple of downgrades. Closing below $7.50 is not a good look, and it could indicate it's going to be in for more downside."

Australia & New Zealand Banking Group fell 2.3 percent to $33.54. The local unit boosted annual earnings 21 percent to $1.86 billion in cash profit, while the Australian group's cash earnings rose 18 percent to A$6.94 billion, although it didn't include the impact of ANZ selling its wealth businesses to IOOF or the 40 percent stake it held in Metrobank Card Corp.

"The share price has lost ground in Australia today, on the surface it looked like a good result but there are concerns going forward," Williamson said. "There are reports about the Sydney apartment scene which the banks have large exposure to, and if Sydney starts to come under significant pressure I wouldn't be surprised if other big cities in Australia did too."

Synlait Milk declined 2.5 percent to $7.78 and Arvida Group dropped 1.7 percent to $1.15.

Freightways dipped 0.8 percent to $7.54. It said sales and profit rose in its first quarter, putting the courier and information management company on track for annual earnings growth. Net profit was $15.1 million excluding certain items in the three months ended Sept. 30 from $14.1 million a year earlier, the Auckland-based company said in a statement. Operating revenue rose 7 percent to $143 million.

Comvita was the best performer, up 4 percent to $8.35.

"It's still getting re-rated following the announcement a while ago, though it's still well under what it was in 2016. It's certainly had a nice recovery," Williamson said.

Tourism Holdings gained 2.5 percent to $4.85, Trade Me Group rose 2 percent to $4.58 and Air New Zealand gained 1 percent to $3.39.

Outside the benchmark index, Skellerup advanced 2.3 percent to $1.76, the highest it has traded since July 2014. Yesterday, the industrial rubber goods maker said first-quarter trading had been strong and it expects improved earnings in 2018.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Reserve Bank: Ongoing Monetary Tightening
The Monetary Policy Committee today increased the Official Cash Rate (OCR) to 3 percent from 2.5 percent. The Committee agreed it remains appropriate to continue to tighten monetary conditions... More>>

Statistics: Weekly Earnings Rise As More In Full-time Employment

Median weekly earnings from wages and salaries rose by 8.8 percent to $1,189 in the year to the June 2022 quarter, Stats NZ said today... More>>

Bell Gully: Uncertainty Ahead With New Unconscionable Conduct Legislation

new prohibition against ‘unconscionable conduct’ in trade is one of a number of changes to the Fair Trading Act 1986 that come into force from 16 August 2022. The new prohibition may have wide-ranging implications for many businesses... More>>

Electricity Authority: Imposes Interim Restrictions On Very Large Electricity Contracts

Consumers of electricity will be protected from potentially paying more than they should due to the impact of very large electricity contracts on wholesale prices, under urgent changes announced today by the Electricity Authority... More>>

Westpac: Economic Overview, August 2022 – Pushing Through

The New Zealand economy faces some lean growth in the year ahead as households’ budgets are squeezed, according to Westpac’s latest Economic Overview... More>>

Kiwi Group Holdings: Fisher Funds Acquires Kiwi Wealth Business

Kiwi Group Holdings Limited (KGHL) today announced the sale of Kiwi Wealth to Fisher Funds for NZ$310 million... More>>