Steel & Tube to drop out of S&P/NZX 50
Steel & Tube Holdings is to drop out of the S&P/NZX50 benchmark index on Sep 16, despite a recent rally.
The value of its shares hit their lowest level since 2001 in June at $1.79 following a difficult few months.
In March the Commerce Commission began an investigation into earthquake reinforcing mesh products that weren't certified as claimed, and the company was forced to cut guidance in May as intense competition in the domestic steel market squeezed margins and its Chinese-sourced road reinforcing for the Huntly bypass was found to be weaker than specified.
The shares rallied in August after the Lower-Hutt based company reported better than expected results and First NZ responded by upgrading its rating on Steel & Tube to 'outperform' from 'neutral'.
They peaked at $2.44 on Aug 24. but have since fallen to $2.21. Shares are down 2.2 percent since January 1.
Rubber goods company Skellerup will also drop out of the index. It reported annual profit down 6 percent when it updated the market with its full year results on August 16. Its shares have fallen 9.93 percent since the start of the year.
Agribusiness group Scales Corporation and cinema software developer Vista will replace them in the NZX 50. Vista more the doubled its profit in the first half of its financial year due to increased revenue from acquisitions, while Scales saw net profit rise 3 percent to $33.8 million in its first-half.
Shares in Scales have risen by 34.5 percent since the start of the year and are currently trading at $3.26. Vista's stock has risen by 14.7 percent and is currently at $6.70.