Shares rise as Fletcher lifts from slump


New Zealand shares rose as Fletcher Building made up some ground after Monday’s downgrade-induced slump, while A2 Milk and Goodman Property Trust gained.

Fonterra Shareholders’ Fund fell ahead of its first-half results on Wednesday.

The S&P/NZX 50 Index rose 28.50 points, or 0.4 per cent, to 7,085.55. Within the index, 27 stocks rose, 18 dropped and five were unchanged. Turnover was $149 million.

Fletcher gained about 1 per cent to $8.36, having slumped 10 per cent on Monday after unexpectedly cutting its full-year earnings guidance by $110 million because of losses related to construction projects.

“We saw an initial knee-jerk reaction downwards on Fletcher’s negative news yesterday and then later in the day we did start to see some bargain hunters come back into the market,” said Grant Williamson, a director at Hamilton Hindin Greene.

“The bigger picture is the news they came out with increased uncertainty about the company and in its management as well.”

Kathmandu rose 1.6 per cent to $1.96 after the outdoor clothing chain reported first-half profit of $10 million, just ahead of its guidance of $9.9m and up from $9.4m a year earlier.

Goodman Property rose about 3 per cent to $1.215, Precinct Properties climbed 1.7 per cent to $1.20, Argosy Property gained 2 per cent to $1.01 and Kiwi Property Group rose 0.4 per cent to $1.385.

Mr Williamson said property stocks have suffered in the past six months, as rising interest rates eroded the appeal of their dividend yields.

Fonterra fell 0.8 per cent to $6.22 ahead of its first-half results, which Mr Williamson said are likely to reflect what was an underwhelming start to the dairy season. By contrast, milk and infant formula marketer A2 Milk led the index higher, gaining 4.5 per cent to $2.80.

Sanford declined 2 per cent to $7.25 in its first day on the NZX 50.

Originally published as Shares rise as Fletcher lifts from slump



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