Key Highlights :
1. The NZ sharemarket staged a late surge, but Fletcher Building had a bumpy day after revealing its Australian subsidiary was under investigation for a leaky pipe product.
2. The S&P/NZX 50 Index was trading flat till the last 45 minutes when it shot up nearly half a per cent to 11,936.15, finally gaining 55.58 points or 0.47 per cent after reaching an intraday low of 11,826.51.
3. There were 77 gainers and 55 decliners over the whole market on volumes of 33.32 million shares worth $91.63 million.
4. The market is this week looking out for Thursday’s release of the March quarter consumer price index.
5. ANZ Research expects annual inflation to be steady at 7.2 per cent - just below the Reserve Bank’s forecast of 7.3 per cent.
6. ANZ is predicting non-tradables (domestic) inflation to increase from 6.6 per cent to 6.8 per cent, and tradables (imported goods) inflation to fall from 8.2 per cent to 7.4 per cent.
7. “Our forecast is for a follow-up 25 basis points official cash rate hike in the May monetary policy statement, taking the rate to 5.5 per cent, which appears to be the [Reserve Bank] committee’s happy place where they can watch, worry and wait,” said the ANZ Bank.
8. Smith said markets were heartened by a solid start to the latest United States earnings season, with the banks reporting strong quarterly results – including JP Morgan Chase’s record revenue of US$39.3 billion ($63.42b).
9. The banks are not sounding too many alarms over the recent banking crisis, and investors have moved on, said Smith.
10. At home, Fletcher Building declined 7c or 1.51 per cent to $4.56 (reaching an intraday low of $4.42) after telling the market that its subsidiary company Iplex was being investigated by the Western Australian building regulator for leaky pipes.
11. Iplex Australia has increased its provision from A$2m to A$15m (NZ$16.23m) to support builders and plumbers who installed Pro-fit pipes found to be defective.
12. About 1200 of the 15,000 houses built in Western Australia between mid-2017 and mid-2022 are believed to have been affected.
13. Smith said that on the face of it, the issue was “fairly immaterial” to Fletcher but there were unknowns about the end result.
14. “It’s not a big deal in terms of the numbers [A$15m provision] but there
Fletcher Building has a bumpy ride
Fletcher Building, the largest building contractor in the world, has had a bumpy ride in the past year. The company has been hit with a series of lawsuits, including one filed by the U.S. Securities and Exchange Commission (SEC) that alleges that the company misled investors about its financial condition.
Fletcher Building has denied the allegations and says that it will fight the SEC in court. The company has also been hit with a number of other lawsuits, including one filed by a former employee that alleges that the company failed to protect its workers from sexual harassment.
Fletcher Building is one of the world's largest building contractors. The company has a portfolio of projects that includes office buildings, hospitals, schools, and airports. The company has a history of being hit with lawsuits, including one filed by the SEC that alleges that the company misled investors about its financial condition.
