What: In a trading week when the S&P ASX All Ordinaries Index (ASX: ^AORD) is down 0.5% in the past five days, Leighton Holdings Limited's (ASX: LEI) share price rose about 5%.
So What: In the case of Leighton Holdings, there are four reasons that could be giving the infrastructure developer and engineering company a leg up in share price.
1) New management is making changes
With the new CEO, Marcelino Fernandez Verdes, and a reformed board, the company can make the necessary changes to drive growth and strengthen Leighton's financial position. The majority shareholder, Germany-based Hochtief, increased its shareholding to put these changes in place.
2) Business is being restructured
By changing the business division structure, Leighton Holdings subsidiary companies like Theiss and John Holland will cover specific work types, which will reduce internal competition for contracts and allow for better cost management.
3) New contracts are still coming in
Apart from the infrastructure contracts for motorways, tunnels and buildings in places such as the Philippines, Hong Kong and Dubai, new mining work in WA is coming in with Rio Tinto Limited (ASX: RIO) and the Roy Hill iron ore mine project.
It also has contracts in the energy sector, such as with the Ichthys onshore LNG project in NT, Chevron Corporation's (NYSE: CVX) Gorgon project and the Australia Pacific LNG project, which is part owned by Origin Energy Limited (ASX: ORG). This helps offset the mining industry's weakness.
4) $50B Federal budget infrastructure spending plan
The proposed Federal budget intends to implement a $50 billion infrastructure spending plan for roads, tunnels and other social infrastructure over the next six years. As Leighton is one of the country's largest construction contractors, it could directly benefit from winning some of the associated contracts.
