MARKET CLOSE: NZ shares up, trading quiet ahead of election

Article – BusinessDesk

MARKET CLOSE: NZ shares up, trading quiet ahead of election; Fletcher, TradeMe gain, A2 fallsMARKET CLOSE: NZ shares up, trading quiet ahead of election; Fletcher, TradeMe gain, A2 falls

By Sophie Boot

Sept. 22 (BusinessDesk) – New Zealand shares rose in light trading ahead of tomorrow’s general election, with Fletcher Building and Trade Me Group rising while A2 Milk dipped.

The S&P/NZX500 Index rose 19.37 points, or 0.3 percent, to 7,814.78. Within the index, 27 stocks rose, 19 fell and four were unchanged. Turnover was $121.8 million.

“It’s absolutely dead today, there just seems to be an utter lack of interest in doing anything ahead of the election given that there’s an unclear outcome,” said Rickey Ward, NZ equity manager at JBWere. “The polls have had a material influence leading up, everyone’s now just sitting on their hands – we’re just playing around the edges. Markets don’t like uncertainty, and we’re heading into a period of uncertainty.”

Fletcher Building rose 0.3 percent to $7.79, though it spent most of the day trading down, hitting a three-month low of $7.71 on intraday trading. The stock has weakened on media reports that it has hired KPMG to audit four construction projects in its building and interiors unit. The company dumped chief executive Mark Adamson in July amid cost blowouts at two major construction projects – the Auckland convention centre and the Justice Precinct in Christchurch – which have been said to be under KPMG audit.

“That has spooked the market yesterday and continued today. The company has gone incredibly quiet, which is disappointing – it’s what got them in a pickle in the first place,” Ward said. “There’s been no real clarity about why you’ve got another auditor in there, so that has frightened people that further negative news from a company that has had three downgrades is imminent. If that’s the case shareholders will be looking for further changes, rightly or wrongly. It’s a repeat offender – it becomes hard to believe what they’re telling you.”

Trade Me Group was the best performer, up 2 percent to $4.59, while Summerset Group Holdings gained 2 percent to $5.10 and Tourism Holdings gained 1.8 percent to $4.60.

A2 Milk Co dipped 0.3 percent to $5.99. It’s the best performing stock on the index this year, up 182 percent, and reached a record $6.12 last Monday before bouncing around this week.

“It pops its head up then drops back, it can’t seem to get past the $6 mark,” Ward said. “That often happens to growth companies. They’re momentum driven, people follow positive news and the day you disappoint people look at what they’ve been paying for the momentum, then all hell breaks loose.”

CBL Corp was the worst performer, down 1.4 percent to $2.80. Genesis Energy dropped 1.2 percent to $2.40 and NZX fell 0.9 percent to $1.17.

Outside the benchmark index, SLI Systems rose 13 percent to 26 cents after releasing its annual report today. In announcing its annual results last month, the company said it was undertaking a major change in sales strategy as it battles for market share among retailers whom it says are increasingly resisting the costs and logistics of deploying numerous technologies at once.

The company announced a $1.6 million loss for the year to June 30, widening a loss of $162,000 last year, but says it has $5.6 million in cash on hand, just $400,000 less than it held at the beginning of last year.

TruScreen was unchanged at 17.5 cents. Director Tim Preston threw down a challenge to other board members in opting not to seek re-election at yesterday’s annual meeting, saying the NZAX-listed cervical cancer test developer’s governance needs greater diversity and a wider skill set.

(BusinessDesk)

Content Sourced from scoop.co.nz
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