MARKET CLOSE: NZ shares rise; Fletcher in trading halt, NZ Refining drops on BP selldown

New Zealand shares rose, with Fletcher Building in a trading halt ahead of an announcement Monday, while New Zealand Refining dropped after BP New Zealand Holdings sold down its stake.

The S&P/NZX50 Index gained 6.16 points, or 0.09 percent, to 7,158.15. Within the index, 31 stocks rose, 14 fell and three were unchanged. Turnover was $381.2 million, with trading boosted by NZ Refining, Sky Network Television and Spark New Zealand.

Fletcher Building gained 1 percent to $9.22 before being placed in a trading halt minutes after the market opened for what it said was a review of the financial performance of its construction division and the impact on earnings guidance previously provided to the market.

"We'll find out on Monday what that means, but it doesn't sound good," said Mark Lister, head of private wealth research at Craigs Investment Partners. "It's a little bit unusual to go into a trading halt just because you're putting out an update. I'm not sure why they've been forced into that for a whole day just to provide an update, but my read would be we'll see a downgrade to their earnings forecast for the full year."

"It's a bit of an enigma to be honest - you've had this wonderful construction backdrop for the last few years and you'd think companies like Fletcher are going great guns, whether it's from the Christchurch rebuild or the housing market, but for whatever reason they don't seem to be able to capture and benefit from that," Lister said. "I think it'll be quite a frustrating one for people if they come out with softer full-year guidance, the last result was a bit so-so and the share price performed pretty badly in the wake of that, so it looks like it might be another bit of bad news. If you're a building company and you can't make money when things are as they are, you're probably never going to make money."

Goodman Property Trust led the index higher, gaining 1.7 percent to $1.19, while Kathmandu Holdings gained 1.6 percent to $1.97 and A2 Milk Co rose 1.5 percent to $2.68. Spark fell 2.3 percent to $3.44.

NZ Refining was the worst performer, down 4 percent to $2.39. BP New Zealand Holdings has sold down more than half its holding in the nation's only oil refinery operator, reducing its stake to 10.09 percent. It intended to sell 34.7 million shares, or 11.1 percent of the company, for at least $2.30 per share, and sold at $2.32 per share, valuing the transaction at $80.5 million. That price was a 6.9 percent discount the yesterday's closing price of $2.49.

"The stock's performing reasonably well, it's holding up solidly above the price that placement was done at so that tells you investors are reasonably comfortable with that story," Lister said.

Sky TV fell 2.8 percent to $3.49, while Warehouse Group lost 2.6 percent to $2.29 on its last day on the benchmark index.

"Warehouse hasn't had a great week, it's off a good 5 or 6 percent this week and coming out of the 50 will probably keep it under a bit of pressure because it won't be on the radar for as many investors," Lister said.

Units in the Fonterra Shareholders' Fund gained 0.5 percent to $6.35. Fonterra Cooperative Group will get to choose whether to accept supply from new dairy conversions from the 2018/19 season under changes to the Dairy Industry Restructuring Amendment Bill, tabled in Parliament late yesterday.

Outside the benchmark index, AFT Pharmaceuticals gained 3.7 percent to $2.80. The pharmaceuticals company raised new funds through a redeemable share issue to fuel international growth and announced plans to raise more capital in a share purchase plan.

(BusinessDesk)