Badly hit stocks rebound
New Zealand shares were mixed, with Fletcher Building and Sky Network Television rebounding after recent selling and companies including Spark New Zealand and Ebos Group shedding their rights to dividends.
The S&P/NZX 50 index gained 34.7 points, or 0.4 per cent, to 8467.33. Within the index, 23 stocks fell, 21 rose and six were unchanged. Turnover was $149.8 million.
“Most of Asia’s in the red and we certainly didn’t get any strong offshore leads, but we had a reasonable day,” said Peter McIntyre, investment adviser at Craigs Investment Partners. “Markets are on a bit of an edge, but we’ve been driven up by Fletcher and Sky TV on good volume.”
Fletcher Building and Sky Network Television are being seen as value plays by some investors due to recent falls, McIntyre said. Sky TV, which rose 1.9 per cent to $2.15, has dropped 40 per cent in the past year, while Fletcher gained 1.8 per cent to $6.41, having fallen 30 per cent in the past year.
“Fletcher Building hit a low of $6.28 early this week and you’re looking at a market that’s relatively well-priced and looking for value plays,” McIntyre said. “If management is able to execute the plans it’s put in place there could be some intrinsic value higher than what the current share price is, and there’s pretty healthy volume running through that stock.”
Sky TV “is trading ex-dividend, but it’s another one where investors have said ‘enough’s enough’ and there must be some value in that business,” McIntyre said. “It’s still got strong free cash flow. Management is trying to stop customer churn.”
The worst performing stocks were led by those giving up dividend rights. Spark New Zealand, which dropped 12.5c or 3.5 per cent to $3.41, gave up an 11c interim dividend and 1.5c special dividend. Freightways dropped 8c or 1.1 per cent to $7.53, after shedding a 14.5c dividend.
NZX dropped 2.7 per cent to $1.07, and Metro Performance Glass fell 2.5 per cent to 77c. Ebos Group declined 25c, or 1.4 per cent, to $18.19, having shed a 33c dividend. It has hired Telstra executive Shaun Hughes as chief financial officer after the health-care and pet-care products group promoted John Cullity to chief executive. Outside the benchmark index, PGG Wrightson was steady at 62c, though it gave up rights to a 1.75c dividend. The firm said it is “open to options” after it hired investment bankers for a strategic review of the business and Australian media reported it is preparing nondisclosure agreements with interested parties. The rural services firm is indirectly controlled by China’s Agria Corp, which owns a 50.2 per cent stake via Agria (Singapore). The AFR named ASX-listed Ruralco Holdings, Elders, Agrium-owned agribusiness Landmark and Champ Private Equity as potential suitors. —