Market close: Fletcher Building shares plunge, dragging NZ market lower

Fletcher Building CEO Ross Taylor said its subsidiary's pipe problems were "not a $1.8 billion problem". Photo / Jason Oxenham

New Zealand’s benchmark index fell almost 1 per cent on the first day of market trading following the National Party claiming victory at the 2023 election on Saturday night.

The S&P/NZX 50 Index fell 80.6 points, or 0.72 per cent, to 11,185.08. Turnover was $80.3 million. There were 48 gainers and 81 decliners on the main board.

Peter McIntyre at Craigs Investment Partners said the market hadn’t experienced the jump that investors thought might happen after the change in government - but the leadership change would be working its way through the market over the next couple of weeks.

Fletcher Building resumed trading today after going into a trading halt last Wednesday following claims made by Australian firm BGC that pipe problems from Fletcher’s subsidiary Iplex would cost it A$1.8 billion ($1.9b).

“This is not a $1.8 billion problem,” Fletcher’s chief executive Ross Taylor said on Friday in a presentation disputing BGC’s claims. Fletcher fell more than 13 per cent after the market opened and ended the day down 57 cents or 11.6 per cent to $4.33.

McIntyre said the stock had gathered more strength after the Aussie market opened in the afternoon.

The shares traded over $16.2m in value on the NZX over the day.

In other news, SkyCity Entertainment told the market that its chief executive Michael Ahearne will be leaving the company at the end of March 2024. Ahearne joined the company in December 2017 as its group chief operating officer and was appointed chief executive in Nov 2020.

The casino operator was down 5c or 2.5 per cent to $1.95 by early evening.

Tower was up 3c or 4.9 per cent to 64.5 cents after the insurer revised its net profit after tax guidance.

It now expects a net profit of between $7m and $10m - including large events - which is up from its previous range of between a loss of $2m and a profit of $3m.

McIntyre said the update was positive.

“Insurance companies have actually performed well because of the higher interest rates,” he said. “They’re able to earn more off their cash than what they ever have before in the last 10 or 15 years.”

Apple grower Scales Corp was up 10c or 3.2 per cent to $3.19 and Channel Infrastructure was up 3c or 2 per cent to $1.50.

Auckland International Airport, which holds its annual meeting tomorrow, ended the day up 5.5c or 0.7 per cent to $7.92. The dual-listed airport told the market that it’s considering an offer of fixed-rate bonds, maturing in November 2029, to New Zealand retail and institutional investors.

Tourism operator Tourism Holdings, which holds its annual meeting later this week as well, was down 11c or 3.1 per cent to $3.49.

Dairy stocks were also down, Synlait Milk fell 5c or 3.6 per cent to $1.35 and A2 Milk edged down 4c or 0.9 per cent to $4.51. Fonterra Shareholders’ Fund Units were down 1c or 0.3 per cent to $3.08. The next global dairy trade auction is this week.

The New Zealand dollar was trading at US59.06c at 3pm in Wellington, down from US59.27c on Friday. The trade-weighted index was at 70.34, from 70.50 on Friday.