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MARKET CLOSE: NZ shares rise, Metro Glass and A2 gain, while Fletcher drops again

Thursday 23rd March 2017

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New Zealand shares rose, led by Metro Performance Glass and A2 Milk Co, while Fletcher Building began falling again after giving up dividend rights.

The S&P/NZX50 Index rose 1.72 points, or 0.02 percent, to 7,062.55. Within the index, 22 stocks rose, 19 fell and nine were unchanged. Turnover was $186.5 million.

Metro Performance Glass led the index, up 4.3 percent to $1.45, continuing its recovery after weakness following its results. A2 Milk Co gained 2.5 percent to $2.84, Sky Network Television rose 2.4 percent to $3.78 and Ryman Healthcare advanced 1.8 percent to $8.35.

Fletcher Building was the worst performer, down 5 percent or 42 cents to $7.92, after giving up rights to a 2.7 cent final dividend. The shares plunged over 10 percent on Monday after it unexpectedly cut full-year earnings guidance by $110 million because of losses related to construction projects. The downgrade came just four weeks after the company affirmed earlier guidance for the full-year while announcing its first-half results.

"It's a reasonable volume day, it got up to 10 million on the 20th and for the past few day's we've had high 4s, low 5s, which is quite a lot of volume - at the higher end of the range," said Shane Solly, director, portfolio manager & research analyst at Harbour Asset Management. "Certainly some offshore investors may have gotten a bit of a surprise at this, it has been very well owned and invested in, particularly by some Australian institutional investors. There's a bit of disappointment rolling through. Perhaps it's investors taking a view on New Zealand in a broader context, saying it's been a very strong economy, a very strong market, and we'll just take some profits."

Xero dropped 2.8 percent to $19 while Argosy Property dipped 1 percent to $1.

Heartland Bank fell 2.4 percent to $1.61. The New Zealand Shareholders Association has criticised Heartland over a $40 million of capital completed this month after its discounted share purchase plan closed more than three times oversubscribed. The lender raised $20 million selling shares to existing investors at $1.46 apiece in March, and the offer was scaled back because it received applications for $62 million of shares. That added to $20 million it raised via a placement to institutional investors at the same price in December. 

Spark New Zealand declined 0.4 percent to $3.385, while TeamTalk rose 6.4 percent to 83 cents. Spark New Zealand says an independent valuation range for its takeover target TeamTalk, lacks credibility and the top end of the range amounts to an "absurd premium". TeamTalk shares surged after the report was released and are now higher than Spark's offer price.

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