NBN contractors gain in post-election trading

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NBN contractors gain in post-election trading

Market rewards FTTN network?

ASX-listed NBN contractors have had a good first day of trading since the Coalition was elected to government, today beating the broader S&P/ASX200 index gain of 0.71 percent.

Downer EDI, which was awarded a third rollout contract with NBN Co shortly before the government entered caretaker mode, ended the day almost 1 percent higher at $4.49.

Leighton Holdings, whose subsidiaries Thiess and Silcar also snagged NBN contracts before the government went into caretaker mode, gained 1.58 percent to $18.59.

Leighton subsidiary Visionstream also has a three-year contract to perform remediation activities on Telstra’s pit and pipe infrastructure in Victoria and Tasmania. 

Transfield Services, which was awarded one new and one extended contract with NBN Co for network builds in Victoria in June, gained almost 3 percent to end the day at $1.22.

Service Stream, which last month walked away from NBN work under its Syntheo joint venture with Lend Lease, had one of its most positive sessions in months, putting on 10 percent to close the day at 16.5 cents.

Service Stream's work on the NBN forced it into a two-month trading halt, and the company has forecasted it will lose $20 million on its Syntheo joint venture. Its partner Lend Lease ended the day flat.

The Coalition has promised a lower-cost fibre-to-the-node broadband network, which is likely to significantly impact the construction projects currently underway by NBN contractors.

Incoming Communications Minister Malcolm Turnbull has said current NBN Co contracts with construction firms will be honoured, however it’s possible the contracts could be adjusted to accommodate the altered project.

Telstra, whose CEO David Thodey has remained firm on the $11 billion the telco is demanding from NBN Co for access to its copper network, rose broadly in line with the market to close 0.62 percent higher.

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