MARKET CLOSE: NZ shares dip, Metro Glass and Fletcher Building fall while NZ Refining gains

Thursday 17th November 2016

New Zealand shares dipped, led lower by Orion Health Group and Metro Performance Glass, while New Zealand Refining Co gained on improved margins.

The S&P/NZX50 fell 9.93 points, or 0.2 percent, to 6,814.65. Within the index, 25 stocks fell, 20 rose and six were unchanged. Turnover was $145.6 million.

Orion Health Group was the worst performer on the index, down 3.8 percent to $2.79.

Metro Performance Glass declined 3.1 percent to $2.16 while Fletcher Building dropped 2.7 percent to $10.65. Both stocks had rallied this week following Monday morning's 7.8 magnitude earthquake near Kaikoura, on anticipation a rebuild would bolster their profits.

"If you look at the damage versus Christchurch, without looking at anything specific most of the damage appears to be to infrastructure - roads and rail - and so you're not going to get a great extra demand for building products, wheareas Christchurch it was lots of houses," said David Price, broker at Forsyth Barr. "There was initial enthusiasm about what may be the upshot - an elongated cycle in the construction sector, because we're running pretty much at full capacity as it is."

New Zealand Refining was the best performer, up 5 percent to $2.73. The oil refiner today released its throughput and margin report for September and October, with a gross refining margin of US$7.49 per barrel and processing fee income of $52.5 million.

"The gross refining margin was very strong again, we have a pretty big upgrade to our profit numbers and that's a continuation of the positive news of late," Price said.

Heartland Bank rose 3.3 percent to $1.57. It reported a 21 percent increase in quarterly profit, reflecting growth in its loan book, and affirmed its guidance for 2017 earnings to rise as much as 11 percent.

Stride Property Group gained 1.1 percent to $1.83. The property investor, which manages 71 properties worth $2 billion, posted a 21 percent gain in first-half earnings after restructuring its business.

Precinct Properties New Zealand was unchanged at $1.215. The company is upbeat about its tilt towards Auckland, where it sees downtown real estate underpinned by an expanding population, while in Wellington it prefers government tenancies over corporates, chief executive Scott Pritchard told shareholders at today's annual meeting in Auckland.

Outside the main index, Rakon dropped 15 percent to 17 cents. The company posted a first-half loss, blaming a sluggish telecommunications network industry for lacklustre sales.

Steel & Tube Holdings gained 0.9 percent to $2.32. Chief executive Dave Taylor says a "dramatic upswing" in coking coal prices and higher iron ore prices meant there needs to be a hike in domestic steel prices in New Zealand next year.

Veritas Investments was unchanged at 20 cents. Disgruntled shareholders fired a salvo of questions over poor performance and the tanking share price for the group, which includes the Mad Butcher, Nosh, and Better Bar Company brands, at today’s annual meeting in Auckland. In August it reported a full-year loss of $4.6 million, compared with a $3.3 million profit the prior year.

BusinessDesk.co.nz

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