close
MENU
2 mins to read

Market close: Warehouse down on Noel Leeming skepticism, Fletcher up


Fletcher Building rises 1.4% to $8.45, the highest close since early July 2011.

Wed, 11 Jul 2018

New Zealand shares fell, led by Warehouse Group on concern its decision to buy appliance and electronics retailer Noel Leeming puts it in the toughest part of the market. Fletcher Building rose to a 17-month high.

The NZX 50 Index fell 4.59 points, or 0.1 percent, to 4026.18. Within the index, 23 stocks fell, 13 gained and 14 were unchanged. Turnover was about $123 million.

Warehouse dropped 2.6 percent to $3.02. Yesterday, the biggest retailer on the bourse said it had acquired Noel Leeming for $65 million from Gresham Private Equity.

The target company has been unprofitable for the past two years and the buyout firm sold the chain for less than it had paid.

"Noel Leeming has clearly struggled," says Greg Easton, an adviser at Craigs Investment Partners. The chain had been "a pretty sour deal" for Gresham and Warehouse "is going to have to prove" it was a good buy.

Fletcher Building rose 1.4 percent to $8.45, the highest close since early July 2011.

While the stock has benefitted from data showing the housing market is heating up in New Zealand, a bigger driver of the stock has been calls in Australia for investors to reweight to a construction sector beaten down by "a pretty poor run in recent years, Mr Easton says.

TeamTalk, the owner of the CityLink fibre-optic broadband service, rose 2.8 percent to $2.98 after shareholders have voted in favour of the acquisition of Farmside Group for up to $42 million in cash and shares to extend its reach into rural areas.

New Zealand Oil & Gas gained 1.2 percent to 88 cents after the oil and gas explorer picked up an offshore Taranaki permit in the government's latest block offer round.

OceanaGold, operator of the Macraes gold field, fell 2.3 percent to $3.46, the lowest since mid-September.

The shares have dropped since it announced last week that it would raise $C108 million in a fully-underwritten share issue to repay debt and bolster its balance sheet.

Chorus, the network company spun off from Telecom last year, fell 0.4 percent to $2.72, charting another record low close after the Commerce Commission's draft determination on pricing last week, which that company said could slash earnings.

A2 Corp, which markets milk with a protein variant claimed to have health benefits, fell 3.9 percent to 50 cents, the price of its discounted placement raising $20 million last week.

Trade Me, the auction website, fell 2.1 percent to $4.12.

Kathmandu, the outdoor equipment chain, rose 4.8 percent to $1.95 and Pumpkin Patch, the children's clothing retailer, rose 3.1 percent to $1.34 after government figures showed retail spending on debit, credit and charge cards rose 0.5 percent last month, more than expected.

(BusinessDesk)

© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Market close: Warehouse down on Noel Leeming skepticism, Fletcher up
26186
false