Latest / Best of Business / Shane Solly: Harbour Asset Management spokesperson on Fletcher Building's bid to raise $700 million

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Shane Solly: Harbour Asset Management spokesperson on Fletcher Building's bid to raise $700 million · Best of Business

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  Speaker 1: The Harbor Asset Management is with us right now. Shane, Hey, Heather,
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  Speaker 1: what do you make of this news that Fletcher Building
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  Speaker 1: has got the begging bowl out?
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  Speaker 3: Mmmm?
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  Speaker 2: Looks so here the Fletcher Buildings raised seven hundred million
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  Speaker 2: today of new equity. Very much about trying to pay
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  Speaker 2: down some dip give it a bit of strength in
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  Speaker 2: this balance sheet. Certainly, I'll view the reset because a
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  Speaker 2: bit more strength financial strength at least to allow for
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  Speaker 2: improving its operational performance, while training activity remains pretty tough.
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  Speaker 3: So Sydney gives them a bit of a cushion.
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  Speaker 2: I guess outside the capital raise, they've talked about raising
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  Speaker 2: or reducing costs by one hundred and eighty million, and
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  Speaker 2: the course that may include some more job blesses you.
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  Speaker 2: Certainly they resetting the balance sheet, new chief executive officer,
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  Speaker 2: new financial chief funds you officer being back on the tools.
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  Speaker 3: Maybe after the reset the balance sheet.
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  Speaker 2: So yeah, certainly it's a big jump, a little bit
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  Speaker 2: of a surprise.
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  Speaker 3: Market hadn't quite anticipated this.
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  Speaker 1: So it seems to me kind of risky because they've
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  Speaker 1: got the litigation probably coming at them, the class action.
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  Speaker 1: But then on the other hand, seventeen percent discount on
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  Speaker 1: the share price seems okay. Does it kind of balance
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  Speaker 1: out to you?
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  Speaker 2: Yeah, Look, it's interesting that we've seen the company really
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  Speaker 2: raise quite a lot of capital to try and give
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  Speaker 2: it a position where some of these risks are addressed.
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  Speaker 3: So we'll see through time, you know, we can't.
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  Speaker 2: We don't actually know that things are necessarily going to
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  Speaker 2: turn around in a hurry, but certainly they've taken a
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  Speaker 2: pretty aggressive stance and raising capital to give the business
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  Speaker 2: a bit of a chance.
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  Speaker 1: Now, I mean, we've obviously had this one and then
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  Speaker 1: we had last week Auckland Airport's one point four billion
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  Speaker 1: dollar capital raise. You reckon, this is going to become
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  Speaker 1: a thing or a bunch of companies going to try
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  Speaker 1: and do this.
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  Speaker 3: So interesting, we can't really rule it out.
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  Speaker 2: There's a bit of difference between a Orkward airport of
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  Speaker 2: let you build an Elkord airport, raising capital predominate to
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  Speaker 2: support this mass of infrastructure.
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  Speaker 3: Development they're doing.
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  Speaker 2: Pledgu're building more about so we're get to get a
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  Speaker 2: bit of a financial concushion but you know, we think
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  Speaker 2: perhaps there's other companies, maybe they'll be tended to raise
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  Speaker 2: new equity to support growth, But we can't rule out
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  Speaker 2: other businesses saying hey, look we need to the economy
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  Speaker 2: is not getting better.
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  Speaker 3: We're in a tough place. We need to reinforce the
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  Speaker 3: bone shoot, so we can't rule it out either. Yeah.
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  Speaker 1: Speaking of which, we had some more weak economic data today,
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  Speaker 1: didn't we.
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  Speaker 2: Yeah, Look, unfortunately we can't catch a trick here in
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  Speaker 2: New Zealand, and it's probably telling us just how bad
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  Speaker 2: things have got today. We had the Baker August Job
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  Speaker 2: Ads Index and nets based on data on seeks. If
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  Speaker 2: you go and seek, you can see the number of
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  Speaker 2: ads go down and they dropped one point three percent
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  Speaker 2: for the August month on the July month. Doesn't sound
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  Speaker 2: like a lot, but if we aggregate that over the
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  Speaker 2: last twelve months, we're actually down thirty one percent. Massive
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  Speaker 2: drop in the number of job adds. Certainly we're seeing
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  Speaker 2: more application applicants and more people applying for jobs. Really,
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  Speaker 2: you come back to what does it mean. We also
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  Speaker 2: had a really quite a weak trade deficit, so we're
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  Speaker 2: basically imported more than we exported. We're deficit of nine
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  Speaker 2: point three billion dollars. Big number, right, really disappointing, and
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  Speaker 2: that was driven a little bit by one large a craft,
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  Speaker 2: but still a weak number. It all aggregates back to
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  Speaker 2: Reserve bank and zone starts to need to think about
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  Speaker 2: cutting interest rates even more.
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  Speaker 1: What are you going to be looking at out of
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  Speaker 1: the overseas markets tonight?
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  Speaker 3: Yeah?
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  Speaker 2: Interesting, there's some data points out of the US, in particular,
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  Speaker 2: which is activity, economic activity, and of course the Federal
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  Speaker 2: Reserve recently cut rates and they said, look, we're going
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  Speaker 2: to go again if we think interest rates sorry, if
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  Speaker 2: activity is going to drop more. Tonight We've got the
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  Speaker 2: Chicago Feed National Activity Index and USMP Global Composite Purchasing
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  Speaker 2: Manager Industry, and you got to go, who cares. They're
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  Speaker 2: very good lead indicators for employmentages. So that's what the
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  Speaker 2: US for the Reserve is worried about. They want to
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  Speaker 2: make sure unemployment rates don't go through the roof, and
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  Speaker 2: perhaps SIS just gives and more ammunition to keep cutting right. Similarly,
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  Speaker 2: we have our number out in Europe, which is the
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  Speaker 2: European Purchasing Managerity, and we've seen the European Central Bank
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  Speaker 2: go we need to cut rates again to Mere but
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  Speaker 2: going on tomorrow, we've got a bit of activity in
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  Speaker 2: the Australian economy where the Reserve Bank of Australia's due
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  Speaker 2: to come out with their.
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  Speaker 3: Cash right decision. Expectation is pretty low of a cut.
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  Speaker 3: In fact, perhaps the.
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  Speaker 2: Australian economy is going through where we were six to
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  Speaker 2: twelve months ago. So low expectations of cuts from the RBA.
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  Speaker 2: But hey it's it's not our it's not totally a zero,
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  Speaker 2: but odds are very low.
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  Speaker 1: Yeah, hey, Shane, thank you so much, as always appreciate it.
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  Speaker 1: Shane solely Humber Management.
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