MARKET CLOSE: NZ shares down, dragged by Fletcher, while Metlifecare, Metro Glass fall

New Zealand shares dropped, led lower by Fletcher Building's earnings downgrade, with Metlifecare and Metro Performance Glass also falling.

The S&P/NZX 50 Index fell 101.1 points, or 1.4 percent, to 7,057.04. Within the index, 36 stocks dropped, eight rose and six were unchanged. Turnover was $207.6 million.

Fletcher led the index lower, down 10.2 percent to $8.28. The stock was placed in a trading halt on Friday, but the shares tumbled after the company cut its full-year earnings guidance by about $110 million because of complexity and delays with a major development that showed up during a review of its construction division.

"The market's had all weekend to speculate, from an earnings perspective it's come from a more negative side of things - 15 percent down for the year," said Michael De Cesare, research analyst at Nikko Asset Management. "The reaction was quite firm early but when Australia opened it finished up, it had gotten as low as $8. You never know with Australia, given they're big holders of the name, whether they'll give the extra hammer blow or in this case they've bid it back up."

The downgrade comes less than four weeks after Fletcher affirmed its earlier guidance with its first-half results, which included just $1 million contribution from its New Zealand construction business, despite gross revenue from construction soaring 54 percent to $1.15 billion in the first half. The slump reflected losses incurred on a major construction project, which it didn't identify, and it kept the identity of the project secret today, citing client confidentiality.

"It's disappointing that there's suddenly new meaningful information to provide to the market, it always leaves one somewhat skeptical about whether that would've been known in the first instance and could've been incorporated in the result," Mr De Cesare said.

The index's weakness was partly explained by Fletcher Building's drop, which is 7.3% of the index, but the local benchmark saw broad-based weakness today led from offshore, with the ASX 200 down 0.5% as of 5:30pm New Zealand time. 

"We tend to take a lead from Australia when they open, if they're having a down day we get dragged into it," Mr De Cesare said. "Overnight we'll see if global markets continue the negative tone they finished the week before on or they'll keep on pushing record highs - it will give some direction to what's going on here."

Auckland International Airport, which gave up rights to a 10c dividend, dropped 3% or 21 cents to $6.85. Metlifecare fell 2.4% to $6.05 and Metro Performance Glass dropped 2.1% to $1.43.

Meridian Energy was the best performer, up 1.4% to $2.84, while NZX gained 1% to $1.05 and Ebos Group rose 0.7% to $18.30.


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

Comments & Questions

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7327 0.0000 0.00%
AUD 0.9211 0.0000 0.00%
EUR 0.6140 0.0000 0.00%
GBP 0.5434 0.0000 0.00%
HKD 5.7285 0.0000 0.00%
JPY 82.1000 0.0000 0.00%

Commods

Commodity Price Change Time
Gold Index 1293.3 6.130 2017-09-22T00:
Oil Brent 56.4 0.420 2017-09-22T00:
Oil Nymex 50.7 0.110 2017-09-22T00:
Silver Index 16.9 -0.034 2017-09-22T00:

Indices

Symbol Open High Last %
NZX 50 7795.4 7814.8 7795.4 0.25%
NASDAQ 6401.4 6429.5 6422.7 0.07%
DAX 12569.7 12646.6 12600.0 -0.06%
DJI 22334.1 22364.3 22359.2 -0.04%
FTSE 7263.9 7320.3 7263.9 0.64%
HKSE 27949.8 27960.9 28110.3 -0.82%
NI225 20413.6 20417.1 20347.5 -0.25%
ASX 5655.4 5688.2 5655.4 0.47%