Record year beckons for NZ shares; index reweighting drives big volume

The S&P/NZX 50 Index remains on track for a record year, nudging higher in heavy trading as investors made way for the latest index reweightings ahead of the holiday period.

Friday, December 20th 2019, 6:30PM

by BusinessDesk

The benchmark index increased 1.68 points, or 0.02 percent, to 11,482.29, and is up about 30 percent so far this year. Within the index, 28 stocks rose, 14 fell, and eight were unchanged. Turnover was $230 million, with 15 stocks trading on volumes of more than a million shares.

NZX and FTSE index reweightings came into effect today, meaning large institutional investors tracking those benchmarks have to change their portfolios to match.

Shane Solly, a portfolio manager at Harbour Asset Management, said there had been some buying in the lead-up to the reweighting and that he expected it to keep washing through the market in coming days.

“This is an illiquid time of the year for markets given that people go away. But this index movement today has been pre-empted to a degree, so we’ve got some stocks like Fisher & Paykel Healthcare that have been very strong, giving back some of that recent performance,” he said.

F&P Healthcare has been the best performer on the NZX50 this year, up 72 percent. It fell 4.2 percent to $22.17 today on a volume of 1.2 million shares, almost twice its 90-day average of 703,000 shares. That was the day’s biggest decline.

Among the year's other top performers, Port of Tauranga increased 1.9 percent to $7.70, Ryman Healthcare was unchanged at $16 with 1.2 million shares traded, and Restaurant Brands New Zealand was unchanged at $12.30.

Solly said low interest rates have been the key catalyst for capital markets this year, and while that may persist into 2020, he expects to see a broader range of outcomes among companies.

Kiwi Property Group was the most traded stock on a volume of 5 million shares. It fell 3.9 percent to $1.495, taking its gain so far this year to 11.7 percent.

Sky Network Television led the market higher, up 5.7 percent at 74 cents, on a volume of 4.1 million shares. The stock has been beaten up by investors this year as they remain sceptical the pay-TV operator can adapt to the new online media environment.

Metlifecare rose 4.3 percent to $6.38 on a volume of 1.2 million shares. It rallied yesterday after the board rejected an indicative takeover bid at $6.50 a share, saying internal valuations put the price at more than $8. It has also attracted two other potential suitors.

Meridian Energy was up 3.9 percent at $5.02 on a volume of 2.9 million shares. The government released consultation papers yesterday about the emissions trading scheme that proposed lifting the current fixed price option and introducing floor and cap prices.

Mercury NZ was up 2.4 percent at $5.03, Genesis Energy increased 1.9 percent to $7.70 and Contact Energy was unchanged at $7.15 on a volume of 2.7 million.

Spark New Zealand increased 0.2 percent to $4.1 on a volume of 3.4 million shares, Goodman Property Trust was up 0.5 percent at $2.19 with 2.7 million units traded, Fletcher Building decreased 0.8 percent to $5.23 on a volume of 2.2 million and Gentrack dropped 2.6 percent to $3.70 with 2.2 million shares traded.

Of other stocks trading on volumes of more than a million shares, Auckland International Airport increased 1.2 percent to $9.10, Air New Zealand was up 3 percent at $3.05, Kathmandu Holdings rose 2.4 percent to $3.38, Argosy Property increased 2.2 percent to $1.38 and A2 Milk was down 1 percent at $15.34.

Tags: Market Close