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Current as of 26/05/17 07:40PM NZST

Stocks lift as 'bargain-hunters' make move on Steel & Tube

By Paul McBeth

New Zealand shares rose as Steel & Tube Holdings rebounded from Thursday's sell-down and Metro Performance Glass gained. Photo / Supplied
New Zealand shares rose as Steel & Tube Holdings rebounded from Thursday's sell-down and Metro Performance Glass gained. Photo / Supplied

New Zealand shares rose as Steel & Tube Holdings rebounded from Thursday's sell-down and Metro Performance Glass gained.

The S&P/NZX 50 Index gained 21.25 points, or 0.3 per cent, to 7024.38. Within the index, 28 stocks rose, 13 fell and nine were unchanged. Turnover was $214.8 million

The biggest gainer was Steel & Tube, up 7.1 per cent to $1.97. It hit a 15-year low on Thursday after saying it was in talks with "multiple agencies" in New Zealand and China over pile casing to be used in bridges for the Huntly bypass that was not up to scratch.

On May 18, Steel & Tube cut its earnings guidance by 10-15 per cent and in April it agreed to only sell seismic reinforcing steel mesh that had been independently tested. The Commerce Commission is investigating possible misrepresentations of the mesh's performance characteristics.

"The bargain-hunters have come into the stock but I think we're likely to see a relatively volatile performance in Steel & Tube until this issue has been completely sorted out," said Grant Williamson, director at Hamilton Hindin Greene.

Metro Glass gained 3.5 per cent to $1.79, with 15.7 million shares traded making it the busiest stock on the index. Crescent Capital Partners Management, which owns 8.3 per cent of the stock, announced it agreed to sell its stake of 15.3 million shares to First NZ Capital for $1.726 per share in a block trade agreement, with settlement on or about June 8.

"The stock has weakened a little since it reported its financial result last week. The price has moved back up on the back of that and maybe the market did realise there was an overhang and that's now been removed," Williamson said.

Outside of that, the market was quiet with little news but positivity carried from Australia, Williamson said, where the S&P/ASX 200 was up 0.8 per cent at 5.15pm NZ time.

Fonterra Shareholders Fund was unchanged at $5.70. Fonterra Cooperative Group has set a strike price for Fonterra Shareholders Fund units of $5.574 for unitholders participating in the dividend reinvestment plan.

Ebos Group rose 1.8 per cent to $16.80, A2 Milk Co gained 1.3 per cent to $1.54 and Trade Me Group advanced 1.3 per cent to $4.74.

Heartland Bank was the worst performer, down 1.6 per cent to $1.25. Kathmandu Holdings dropped 1.3 per cent to $1.49 and Orion Health Group fell 1.3 per cent to $5.24.

- BusinessDesk

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