Another down day on the market; Oceania reports weak earnings

New Zealand shares fell, led lower by Oceania Healthcare after it reported annual earnings significantly weaker due to covid-19.

Thursday, July 23rd 2020, 6:15PM

by BusinessDesk

The S&P/NZX 50 Index declined 29.56 points, or 0.3 percent, to 11,693.41. Within the index, 24 stocks rose, 19 fell, and seven were unchanged. Turnover was $136.4 million.

Oceania reported a net loss of $13.6 million in the year ended May after writing down the value of its property portfolio by $22.5 million. It reported a $45.4 million profit in the prior year.

Its share price fell 3.9 percent to 99 cents but had been steadily gaining in the run up to the result.

“Oceania was going to have a flat 12 months anyway, but that revaluation headline spooked the market,” Brad Gordon, an investment adviser at Hobson Wealth said.

Other retirement stocks had a mixed response to the sector’s first earnings report post-covid.

Arvida Group declined 1.2 percent to $1.62 and Summerset Group Holdings fell 0.5 percent to $7.85. Ryman Healthcare gained 0.4 percent to $13.64 and Metlifecare held at $5.91.

Stuart Williams, head of equities at Nikko Asset Management, said that, even within sectors, various stocks in the benchmark had been moving in different directions.

“It is just normal investors' interpretation of company specifics as opposed to some global overview,” he said.

Chorus dropped 2.6 percent to $7.25 as the Commerce Commission began consulting on regulatory changes that will affect the company’s future return expectations.

Spark New Zealand fell 0.9 percent to $4.865 after gaining almost 10 percent this month. Gordon said this had been driven by steady demand for yield stocks.

“The catalyst has been people rolling off term deposits and looking for alternatives,” he said.

Vector, which is also considered a yield play, rose 2.9 percent to $3.93, bringing its gain this month to more than 8 percent.

Fisher & Paykel Healthcare dropped 1.8 percent to $35.35, the strong kiwi dollar is acting as a headwind for the exporter which is trading at near its record high.

Auckland International Airport dropped 1.7 percent to $6.31 while Air New Zealand rose 0.8 percent to $1.33.

Z Energy extended its rally after reporting better than expected first-quarter cost savings and improved market share. The stock rose 1.7 percent to $2.94.

New Zealand Refining Company, in which Z Energy is a cornerstone shareholder, rose 1.5 percent to 69 cents, extending yesterday’s gains after it announced it had “detailed planning” underway to simplify the refinery.

Argosy Property rose 3.3 percent to $1.27, posting the day’s biggest gain, but other property stocks were mixed.

Stride Property and Kiwi Property Group each dropped 0.5 percent to $1.94 and $1.07 respectively. Vital Healthcare Property Trust gained 1.9 percent at $2.66 and Goodman Property Trust rose 1.4 percent to $2.22.

Sky Network Television opened stronger after Jarden upgraded the stock and said establishing a sustainable operating model was not an “insurmountable task”. However, the early gains faded, and the stock ended flat at 14 cents.

Outside the benchmark index, Cavalier Corp leapt 22.7 percent to 27 cents. The wool and carpet company today said stock levels had decreased "significantly" to about $35 million, on the back of "stronger than anticipated" trading through June, particularly in wool sales.

Tags: Market Close