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Fletcher Building Shares Surge After Annual Result

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Aug 12 NZPA - A 7.98 percent surge in Fletcher Building shares today lifted the entire sharemarket.

Fletcher Building shares rose 56c to 758 after the nation's largest building company reported a $46 million annual loss, but earnings after tax before unusual items for the year ended June 30 were $314m, down 33 percent.

ABN Amro Craigs senior dealer Bryon Burke said the result was better than analysts were expecting and coincided with a signal of private sector partnerships in government infrastructure spending.

Finance Minister Bill English today indicated the Government would look to the private sector to help spend the $7.5 billion set aside for infrastructure investment over the next five years.

"Fletcher are the biggest players. If there is any infrastructure spending in New Zealand you would expected Fletcher Building to be building something along the line," Mr Burke said.

The benchmark NZSX-50 index closed up 24.215 points, or 0.793 percent, at 3079.688. Turnover was worth $82.2 million. There were 44 rises and 40 falls among the 112 stocks traded.

The market would have been down had it not been for the rise in Fletcher Building shares and a 4c rise in Telecom to 276, according to brokers.

Stocks falling included Contact Energy, down 9c to 625. The company reports on Friday.

Brokers said the government review of the electricity sector released today was also a focus of investors as it is aimed at cutting retail power prices and suggested lines companies be allowed to sell power to boost competition.

Vector was unchanged at 208 and Trustpower was unchanged at 760 after initially trading lower.

The freight sector also today expressed disappointment that a review of the road user charges did not scrap them, but Mainfreight was unchanged at 495.

The Warehouse fell 6c to 399, Port of Tauranga fell 10c to 650 and NZOG fell 1c to 163. Fisher and Paykel Appliances fell 1c to 81, Steel and Tube fell 9c to 311 and Tourism Holdings fell 2c to 59.

Auckland Airport fell 3c to 170 and NZ Refining fell 5c to 690.

NZX fell 5c to 785 and SkyTV fell 12c to 457. Property For Industry fell 2c to 107 and AMP Office fell 2c to 81.

In the United States, stocks fell after a prominent banking analyst warned the sector's fundamentals have yet to improve, and an unexpectedly large drop in wholesale inventories raised worries about an economic recovery.

Financial stocks, which had gained about 25 percent in the past month, tumbled after Rochdale Securities analyst Richard Bove painted a gloomy outlook for the banking industry. He said bank stocks were trading on "fumes", and he expected a short term pull-back in their stock prices.

The Dow Jones industrial average closed down 1 percent to 9241.67, the Standard & Poor's 500 Index fell 1.3 percent to 994.33, and the technology-laced Nasdaq Composite Index slid 1.1 percent to 1969.73.

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