F&P Healthcare drives gain as investors hedged on pandemic

Fisher & Paykel Healthcare propped up an otherwise hesitant market as investors turned their attention back to the threat of the escalating global pandemic.

Friday, November 13th 2020, 7:17PM

by BusinessDesk

The S&P/NZX 50 Index rose 29.55 points, or 0.2 percent, to 12,700.17. Within the index, 30 stocks fell, 15 rose and five were unchanged. Turnover was $156.4 million.

Despite the headline gain a majority of stocks were weaker today, the S&P/NZX Mid Cap index, which excludes the 10 biggest stocks, was off 0.8 percent.

F&P Healthcare with its near $20 billion market cap makes up a large portion of the NZX 50. The stock rose 3.5 percent to $33.83 as investors bought it to offset a covid downturn.

Sam Trethewey, a portfolio manager at Milford Asset Management, said the market was acknowledging the heralded vaccine may still be quite a way off.

“Jerome Powell spoke overnight at the European Central Bank Forum and warned that covid is still with us for the interim,” he said. “So, after two or three days of very strong performance from recovery stocks, we have seen that slow down.”

The NZX 50 gained 3 percent across the week, climbing deeper into record territory and up more than 10 percent year to date.

ASB Bank’s Mark Smith said the recent escalation of covid-19 globally was providing a reality check for equity markets sitting at record highs.

While it is possible a vaccine could begin to be available by the end of the year, it is unlikely it will be distributed widely until the second half of 2021. Meanwhile, global case numbers are growing at close to 700,000 per day.

As a result it was the index’s largest and more defensive stocks holding back losses today.

Energy utility Meridian Energy rose 1.6 percent to $6.30 and Mainfreight was up 2.1 percent at $60 — the logistics firm has been grabbing market share during the pandemic.

Some recovery stocks continued to climb out of their deep lows, Z Energy added 1.9 percent at $3.21 and Vista Group International rose 1.2 percent to $1.68, but many others dipped.

SkyCity Entertainment Group fell 2.2 percent to $3.15, perhaps as investors worried community cases of covid-19 in central Auckland could result in the casino having to close its doors if alert levels rise.

Owner of Sylvia Park, Kiwi Property Group was down 1.1 percent at $1.30, other property stocks were also weaker.

Serko fell 2.6 percent to $1.78, Tourism Holdings declined 0.8 percent to $2.55 and Air New Zealand slipped 0.3 percent to $1.595.

Pushpay Holdings posted the day’s biggest fall, dropping 3.2 percent to $7.50.

Outside of the index, shares in mobile advertising firm Plexure fell 9.7 percent to $1.40 as it came off a trading halt after raising $32 million of new capital at $1.20 per share.

Increased risk aversion weighed on the kiwi dollar, which fell from its brief flirtation above 69 US cents yesterday afternoon, dragged lower amid the broader risk asset sell off.

The kiwi dollar was trading 68.19 US cents at 5pm in Wellington, down from 68.85 cents yesterday.

The trade-weighted index was at 72.58 at 5pm, from 73.16 yesterday. The kiwi traded at 94.38 Australian cents from 94.63 cents, 71.56 yen from 72.48 yen, 57.77 euro cents from 58.47 cents, 51.99 British pence from 52.10 pence, and 4.5180 Chinese yuan from 4.5554 yuan.

Tags: Market Close