Fletcher continues slide while big banks give up gains

New Zealand shares were mixed, with Fletcher Building continuing Thursday’s sell- off while Westpac Banking Corp and ANZ Banking Group gave up gains.

The S& P/ NZX50 index dropped 1.6 points, or 0.02 per cent, to 7670.86. Within the index, 21 stocks rose, 18 fell and 11 were unchanged. Turnover was $ 222.8 million. “We are getting pretty close to reporting season, which should give us a good idea of how companies are performing,” said Grant Williamson, investment advisor at Hamilton Hindin Greene.

“We may not see too much happening. Investors might try to position themselves ahead of the results but most will wait.”

Fletcher Building fell 1.5 per cent to $ 7.48. The stock dropped 6.2 per cent on Thursday as the company slashed full- year earnings guidance and flagged an impairment against Australian assets, with chief executive Mark Adamson gone immediately.

The company expects operating earnings in the year ended June 30 of about $ 525 million, down from $ 682m in 2016 and below the $ 610m-$ 650m range the company gave in March, itself a 15 per cent downgrade against earlier guidance because of problems with two major construction projects.

“There’s lots of volume and interest in Fletcher still. After multiple downgrades investor confidence does wane quite a bit,” Williamson said. “Investors will want to see the appointment of a quality chief executive. It will probably remain under pressure for a while yet.”

Westpac Banking Corp led the index lower, down 2 per cent to $ 34.60, while ANZ dropped 1.5 per cent to $ 32.06. The dual- listed banks had gained strongly in the past two sessions after the Australian Prudential Regulation Authority ( APRA) released its new “capital adequacy” targets, requiring a 150- basis- point increase in the minimum safety reserves that must be held by the big four banks there, less than some ob- servers feared. “After that regulatory change we did see a huge rally, but they lost a little bit of ground yesterday, which i s again some profit taking,” Williamson said.

A2 Milk Co fell 1.3 per cent to $ 3.89 and Ebos Group dropped 1.2 per cent to $ 18.

New Zealand Refining Co was the best performer, up 2.5 per cent, and has gained 3.3 per cent since its throughput and margin report for May and June was released on Tuesday. The oil processor said it achieved a gross refinery margin of US$ 7.63 a barrel in the period, and got $ 58.4 million in processing fees, up from $ 43.3 million in the previous year.

CBL Corp rose 2.2 per cent to $ 3.68 and Metlifecare advanced 1.8 per cent to $ 5.60.