F&P Healthcare pushes share market higher

Fisher & Paykel Healthcare gave the local share market a boost after Jarden analysts reiterated their ‘outperform’ rating for its ASX-listed rival ResMed.

Wednesday, January 20th 2021, 6:15PM

by BusinessDesk

The S&P/NZX 50 Index rose 145.14 points, or 1.1 percent, to 13,062.45. Within the index, 22 stocks rose, 21 fell and seven were unchanged. Turnover was $173.3 million.

Much of the Jarden research note focused on an expectation ResMed will have strong growth in its sales of masks, a product F&P Healthcare does not sell.

However, the analysts also said they expected demand for sleep apnoea treatments to recover above pre-covid levels, and for the rapid rise of covid infections & hospitalisations globally to improve earnings from hospital products.

Fisher & Paykel shares jumped 5.7 percent to $33.96, although on a lighter than usual volume with just 650,000 shares traded — its 90-day average is closer to one million.

Grant Williamson, director of Hamilton Hindin Greene, said the price hike may have been due to disproportionate demand on the buy-side from offshore investors.

“This market is quite strange at the moment and the order flow can come strongly from either side to push these prices around,” he said.

Jarden analysts gave the healthcare manufacturer a ‘neutral’ rating and a target price of $33.55 last Friday.

Other stocks were mixed, but as F&P Healthcare is the largest stock it pushed the index back above 13,000.

Contact Energy posted the day’s biggest fall, dropping 4.6 percent to $8.48, and Meridian Energy moved 1.1 percent lower to $7.36. Mercury NZ climbed 3.5 percent to $6.78.

Outside of the top 50 stocks, personal lender Harmoney shares surged 7.5 percent to $3 after it reported 2 percent more loans had been issued in the six months ended December than originally forecast.

Shares in Z Energy rose 1.6 percent to $3.11 after the fuel retailer reaffirmed its guidance. Rising retail fuel volumes and a stronger New Zealand dollar have helped offset higher crude oil costs, it said.

The kiwi dollar was trading at 71.26 US cents at 5pm in Wellington, down slightly from 71.33 cents yesterday.

A note from currency broker OFX said the kiwi had not responded to increased demand for risk assets, as it often does.

The US dollar fell against other currencies as incoming US Treasury secretary Janet Yellen stressed the Biden administration would not stand in the way of market-based dollar weakness.

The trade-weighted index was at 73.80 at 5pm, from 74.00 yesterday. The kiwi traded at 92.33 Australian cents from 92.48 cents, 73.95 yen from 74.16 yen, 58.67 euro cents from 58.96 cents, 52.21 British pence from 52.42 pence, and 4.6104 Chinese yuan from 4.6259 yuan.

Tags: Market Close