Local bourse bucks global slide on Fisher & Paykel result

New Zealand shares rose, led higher by Fisher & Paykel Healthcare which reported a record profit and a positive outlook as the pandemic spurs demand for medical supplies.

Monday, June 29th 2020, 6:01PM

by BusinessDesk

The S&P/NZX 50 Index rose 123.31 points, or 1.1 percent, to 11,252.54. Within the index, 24 stocks fell, 20 rose, and six were unchanged. Turnover was $106.3 million.

The benchmark’s largest stock rose 4.7 percent to a record $33.50 after it beat its earnings guidance, reporting a 37 percent lift in annual profit as demand for its products to treat covid-19 patients soared. Net profit was $287.3 million, up from $209.2 million a year earlier.

The medical devices maker said demand for its respiratory humidifiers had accelerated since early January. While the company does not make ventilators, its range of devices used to aid breathing in surgery were put to use treating less severe cases.

Mark Lister, head of private wealth research at Craigs Investment Partners, said Fisher & Paykel was almost singlehandedly driving the market higher with its “stunning” result.

“We are the only one bucking the trend and I think that is the FPH effect,” he said.

The NZ market had been expected to start on the backfoot after Wall Street faltered on Friday. Other share markets across Asia were weaker today but the local market was an outlier.

While the Fisher & Paykel result was ahead of expectations, the outlook had been somewhat conservative given uncertainty about how long the effects of the pandemic would last. Lister said investors were voting with their money and seeing potential for the strong performance to continue.

Risk aversion still hung-over swathes of the market today as the continued spread of covid-19 made investors doubt the chances of a swift economic recovery.

Lister said this had put investors back in a risk-off mood and the more resilient, defensive companies were performing well.

Domestically focused logistics firm Freightways rose 2.8 percent to $7.09, while international player Mainfreight held at $39.25.

Auckland International Airport gained 3.2 percent at $6.43. Port of Tauranga rose 1.8 percent to $7.56.

Electricity generator and retailer Meridian Energy advanced 2.5 percent to $4.94 and telecommunications provider Spark New Zealand increased 1.1 percent to $4.48.

A2 Milk Company, another star performer through the pandemic, gained 1.7 percent at $19.76.

At the other end of the spectrum, stocks leveraged to global growth were generally weaker.

Global cinema software developer Vista Group International fell 4.5 percent to $1.49, Air New Zealand dropped 2.3 percent to $1.26 and Tourism Holdings decreased 2 percent to $1.96.

Dual-listed lenders fell; Australia and New Zealand Banking Group was down 2.5 percent at $19.68 and Westpac Banking was down 2.4 percent at $18.82.

Kathmandu posted the day’s biggest decline, falling 5.2 percent to $1.09.

Outside of the benchmark index, Rakon shares held at 26 cents after the telecommunications component maker reported better-than-expected earnings and said the outlook, while murky, was generally positive.

Abano Healthcare jumped 17.2 percent to $3.00 after it said it had received two “credible” proposals to buy a cornerstone shareholding in the company, one of which had made an offer to acquire all of the Abano shares in a scheme of arrangement. The offer is now under consideration.

TruScreen shares slipped 1.8 percent to 5.5 cents after it reported its total revenue was down 18 percent to $2.5 million for the year ended March 31.

Tags: Market Close