New Zealand shares gained, led by Vital Healthcare Property Trust and A2 Milk Co, as investors prepared for a potential selloff of Fletcher Building once it updates its losses within its construction division.
New Zealand shares gained, led by Vital Healthcare Property Trust and A2 Milk Co, as investors prepared for a potential selloff of Fletcher Building once it updates its losses within its construction division.
The S&P/NZX 50 Index rose 63.16 points, or 0.8 percent, to 8,122.22. Within the index, 28 stocks rose, 13 were unchanged and nine fell. Turnover was $120 million.
"After five days down in a row, the market has had a reasonable pickup today," said Grant Williamson, director at Hamilton Hindin Greene. "More news flow will start to kick off pretty soon with the reporting season. Investors will be looking forward to getting their teeth into some news."
Tomorrow morning, embattled construction company Fletcher Building's shares are set to be lifted from their trading halt at $7.77. The company will make an announcement increasing the losses at its building and interiors (B+I) unit.
The company was set to come out of the trading halt yesterday but said it had yet to complete a review of key projects and has begun talks with lenders about breaching its banking covenants. Fletcher has said that before the halt is lifted, it will give the market an update of its review and the status of its discussions with its lenders.
"Obviously the market tomorrow will be influenced by Fletcher Building, it is going to take a reasonable hit if it starts trading," Williamson said. "The market can be quite forgiving once or twice, but this is the third time. Investors will be asking a lot more questions about the company, it doesn't give a lot of confidence in their management."
Vital led the index higher, rising 3.4 percent to $2.12. A2 Milk rose 3.1 percent to $9.07 and Meridian Energy gained 2.7 percent to $2.825.
NZX was the worst performer, down 0.9 percent to $1.12. Kiwi Property Group fell 0.8 percent to $1.315 and Tourism Holdings dropped 0.7 percent to $5.54.
Outside the benchmark index, Tower rose 2.3 percent to 66.5 cents. The Auckland-based insurer said recent storms will have a financial impact of about $5 million after tax. It said it is too soon to know the extent of the damage done by Cyclone Gita, which hit Tonga last night having already passed through Samoa and American Samoa and may yet impact Fiji.
"Obviously some of these weather events are going to hit home, and they do have reasonable exposure in the Pacific Islands, but that stock has been drifting in recent days," Williamson said.
(BusinessDesk)
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