Greg Smith, investment specialist at Generate, said there was uncertainty in the markets regarding the latest geopolitical developments, especially the potential United States acquisition of Greenland, which could put at risk the EU-US trade agreement signed last August.
Smith said the expansion of the services sector in New Zealand for the first time since February 2024 showed the economic recovery is broadening – “and maybe it’s recovering faster than forecast”.
The BNZ–BusinessNZ Performance of Services Index for December was 51.5, 4.3 points higher than in November. It was the strongest result since June 2023, but it is still below the survey’s average of 52.8.
Fletcher Building increased 9c or 2.37% to $3.89 after signing a deal with global French firm, Vinci, to buy its construction division for $315.6m – with the potential of increasing to $334.1m for some contracts currently under negotiation.
Chief executive Andrew Reding said Fletcher Building’s future lies in being a focused building products manufacturer and distributor, supported by a strong balance sheet and disciplined capital allocation.
The sale includes Higgins, Brian Perry Civil and Fletcher Construction Major Projects, but not Fletcher’s South Pacific operations.
Fletcher Building is recognising additional provisions of $55m-$65m for probable future claims relating to retained legacy construction contracts. The provision doesn’t include potential litigation liability associated with the NZ International Convention Centre.
Smith said it looked like Fletcher was receiving a good price for its construction division – “It’s certainly a positive transaction for a low-margin, high-risk business that has destroyed the company for a long time and delivered very little of value to the shareholders.“
It’s clear the decks are being cleared, and Fletcher’s earnings will be simpler and easier to forecast. The transaction will reduce debt and allow for a pathway to resuming dividends in the 2027 financial year,” he said.
Other stocks
a2 Milk was down a further 10c to $9.70 on trade worth $11m after reaching an intraday low of $9.25, following the 17% fall in China’s birth rate last year.
Broker Forsyth Barr was at present making no earnings changes for a2 Milk, saying the birth data should not distract investors from the company’s strong in-market execution, with China market share growing from 7% to 11% long term and operating earnings margin increasing 15-16% to 22% long term.
Summerset decreased 4c to $12.22 after reporting a 26% increase in total unit settlements to 1560 for the 2025 financial year.
This included 125 care bed conversions being sold under occupation right agreements. With these excluded, new sales were up 16% to 680, from 588 in the previous year.
Summerset also had a record fourth quarter ending in December, with 448 sales, comprising 207 new sales and 241 resales.
Fellow retirement village operator Ryman Healthcare was up 6c or 2.05% to $2.98.
Smith said Summerset delivered a strong result in a challenging market and had a robust pipeline of committed sales contracts heading into 2026. Summerset is going well in Australia, with 50% of its new development (28 homes) already presold.
Port of Tauranga, up 10c to $8.20, told the market it has made another application under the Fast Track Approvals Act 2024 for the extension of its wharves, at the Sulphur Point container terminal and across the harbour at Mount Maunganui (the Stella Passage project).
The reapplication followed the passing of the Fast-track Approvals Amendment Act in December, which corrected a legislative drafting error in the project description.
Napier Port declined by 9c, or 2.33%, to $3.78. Amongst other decliners, Infratil was down 13c to $11.15; Spark decreased 5c or 2.16% to $2.27; Vulcan Steel fell 36c or 4.17% to $8.27; Michael Hill shed 1.5c or 3.26% to 44.5c; and NZME was down 4.5c or 3.78% to $1.14.
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