James Hardie (ASX:JHX) has dipped -11% on Thursday right out of the gate before issuing a trading pause, leaving investors alarmed as to what’s going on. The answer is in the United States, where James Hardie is dual-listed.
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The big factor is James Hardie, after a rough year for the company’s share price, has effectively fallen out of the MSCI Australia index, which is what some Wall Street banks use as a general guide for stockpicking (or, rather, their algorithms). So that’s not great.
Ongoing U.S. economic concerns continue to pose a risk to upside momentum too, given that the company is effectively a U.S.-focused (but Australia-borne) construction company.
Its pains stretch back to the controversial acquisition of U.S.-based AZEK earlier this year, which was a multibillion-dollar deal valued equal to JHX’s Australian market cap and which was engineered in such a way that it didn’t need to ask shareholders for a vote. Nobody really liked that.
So that explains the de-indexing and, really, most hesitance to invest further in the company. James Hardie is still embroiled in its AZEK purchase, and a lot of the company’s investors are still asking questions.
So after overnight weakness, that’s why Oz shares tanked out the gate and, then, the company paused pending a further announcement.
The question now is: What, exactly, has JHX got to announce?
JHX last traded at $26.05/sh.
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