New Zealand stocks were mixed. Guinness Peat Group led gainers after announcing that it would sell down most of its assets and return the proceeds to shareholders, while Telecom Corp. paced decliners.
The NZX 50 Index rose 1.57 points, or 0.04%, to 3367.44. Within the index, 20 stocks rose, 23 fell, and seven were unchanged. Turnover was $124.9 million.
GPG, the investment holding company, rose 10% to 77 cents, its highest level in more than nine months on news shareholders would get $158 million this year as the company embarks on a gradual sell down of assets, which may leave it solely with the Coats thread-making business. Some 44 million shares changed hands today, the most in more than five years.
The announcement has been a long time coming for shareholders of the diversified investment company, after former chairman and founder Sir Ron Brierley promised a substantial capital return as far back as 2008, when he first flagged his retirement. The global financial crisis put the plans on ice.
“It’s a fantastic outcome in terms of strategic change but there is still a lot of water that needs to go under the bridge in terms of realising the assets,” said Shane Solly, portfolio Manager for Mint Asset Management.
Insurer Tower Ltd., GPG’s biggest local investment, rose 2.6% to $1.99, and fruit exporter and marketer Turners & Growers, another of the company’s investments, was unchanged at $1.70.
Steel & Tube Holdings, which makes steel products for the construction industry, rose 2.1% to $2.44, a day after it reported a 165% jump in net profit to $8.4 million for the six months to Dec. 31 compared to the same period previously.
Fletcher Building, New Zealand’s biggest construction firm, rose 0.6% to $8.16 after the Australian Competition and Consumer Commission gave its proposed Crane Group acquisition the thumbs up.
“While the deal is not yet fait accompli, they were never seen as a major hindrance,” Solly said.
Separately Fletcher said Crane shareholders had lodged 3.9% of the company’s stock in its acceptance facility. That means that Fletcher theoretically controls 18.8% of Crane, up from the 14.9% it already owns. The facility, which was set up for investors to signal their intent to sell, does not constitute acceptance of the A$10.07-per-share offer.
Telecom, the country’s second biggest listed company, fell 1.4% to $2.16 after the telco reported a 32% slide in first-half profit as earnings shrank in its fixed, mobile and data businesses.
The Auckland-based company reported a net profit of $165 million in the six months ended Dec. 31, compared to $243 million a year earlier, coming in slightly short of brokers’ expectations.
The result was heavily influenced by a $53 million increase in tax compared with the same period a year earlier.
“They’re a company that seems to be doing the right things but it is a tough sector to be in,” Solly said.
Mainfreight Ltd., the trucking company, fell 0.6% to $8.15. Yesterday the company reported a 27% rise in net profit before abnormal adjustments to $34.65 million for the first nine months of the financial year, falling short of some market forecasts.
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