F&P Healthcare rally pushes shares higher

Fisher & Paykel Healthcare led the market higher as it recovered from a heavy bout of profit-taking after its annual result on Wednesday.

Friday, November 27th 2020, 7:02PM

by BusinessDesk

The S&P/NZX 50 Index rose 37.81 points, or 0.3 percent, to 12,639.83. Within the index, 29 stocks fell, 16 rose and five were unchanged. Turnover was $137.9 million, a lighter volume due to the Thanksgiving holiday in the United States.

Portfolio manager at Milford Asset Management Sam Trethewey said the medical device manufacturer was bouncing back after investors cashed in capital gains following its record half-year earnings.

“Fisher & Paykel has been huge contributor to the market this year, and has become a big part of portfolios off the back of that. So, to see some profit taking after it reported its result was no surprise,” he said.

Shares in the company rose 4.5 percent to $33.95, although some shareholders are still questioning whether it will still be worth such a hefty price once the pandemic is under control.

Profit-taking was a key theme in other corners of the market. Kathmandu posted the day’s biggest decline as it unwound some gains following its first-quarter update this week. The retailer's shares fell 2.3 percent to $1.30.

Z Energy declined 1.8 percent to $3.22, Fletcher Building slipped 1.4 percent to $5.73 and Auckland International Airport was down 1.9 percent at $7.655.

Meanwhile, Air New Zealand continued to rise, climbing 2.8 percent to $1.86 after it was awarded four months of additional cargo flights under the government’s International Air Freight Capacity scheme.

Air NZ began with 23 cargo flights in the first phase of the scheme and will now run 55 flights weekly under the second phase, with potential for further increases.

Argosy Property climbed 2.7 percent to $1.50 as investors welcomed the news it had upgraded its dividend.

“Any company that increases its dividend, that is a sign of confidence from the board and management in the business and is always very well received,” said Trethewey.

Goodman Property Trust rose 1.1 percent to $2.41 as the only other property stock to climb. Others were weaker, including Stride Property which declined 2.2 percent to $2.22.

Genesis Energy made headlines with the news it was considering selling its 46 percent stake in the Kupe gas field, but market reaction was muted. The stock rose 0.6 percent to $3.285.

Trethewey said it was not unsurprising for investors as other partners in the joint venture are exploring for more wells, while Genesis wants to get capital out of the business.

“You are more likely to see a bigger reaction when they have actually sold the stake,” he said. “Investors would watch closely what they chose to do with that capital”.

Scales Corporation rose 0.4 percent to $4.84, likely buoyed by the news that up to 2,000 Pacific Island workers are to be allowed into NZ from January to help address a shortage of pickers.

The kiwi dollar pushed to a new two-year high, trading at 70.13 US cents at 5pm in Wellington, slightly above 70 cents yesterday.

The trade-weighted index was at 73.94 at 5pm, from 73.81 yesterday. The kiwi traded at 95.16 Australian cents from 95.03 cents, 72.89 yen from 73.01 yen, 58.81 euro cents from 58.70 cents, 52.45 British pence from 52.26 pence, and 4.6135 Chinese yuan from 4.5918 yuan.

Tags: Market Close