Market Close: F&P Healthcare falls along with Aussie peers

New Zealand shares edged lower as Fisher & Paykel Healthcare declined for a third consecutive session as it was caught up with falling Australian healthcare stocks.

Tuesday, September 28th 2021, 7:15PM

by BusinessDesk

The S&P/NZX 50 Index fell 53 points, or 0.4%, to 13,174. Turnover was $167 million.

Fisher & Paykel Healthcare was the main cause of weakness on the index, declining 2.6% to $31.30 in lockstep with other ASX-listed healthcare stocks.

The hospital product manufacturer was trading just marginally lower throughout the morning session but dropped sharply when the Australian market opened at 1pm.

The S&P/ASX 200 was trading down 1.2% in the afternoon session, with F&P Healthcare’s closest competitor ResMed down 3.2%.

F&P Healthcare’s share price has roughly tracked covid hospitalisations internationally, resulting in a widely fluctuating share price.

The stock hit $36.55 – its highest price this year – in late April, the same week global case numbers peaked at 5.8 million new infections.

Its price then gradually trended lower with global cases until about July when new infections began to climb again, before peaking at the end of August.

While the stock has traded as low as $27.81 during this period, its 30-day average price has mostly remained between $33 and $31.

Cancer diagnostics firm Pacific Edge also dropped sharply, 3.2% to $1.51, as its $20 million retail share offer opened at a more than 12% discount to yesterday’s closing price.

Eligible shareholders can buy up to $50,000 worth of stock at a maximum price of $1.35, or the 5-day volume-weighted price on Oct 13 if it is lower.

The company recently raised $80m in an oversubscribed share placement with institutional investors.

Shares in Synlait Milk rose 2.5% to $3.65 as equity analysts raised their ratings on the stock, albeit from negative to neutral recommendations.

“There is a high margin of error in earnings forecasts and return on capital is also unlikely to return to prior highs, in our view. We view risk and reward as broadly balanced at current levels,” said Forsyth Barr analyst Chelsea Leadbetter.

Still, the analyst raised her target price by 3% to $3.55 and Jarden analysts hiked theirs from a deeply negative $2.90 to $3.60.

“Post the May downgrade, solid progress has been evidenced in this result on securing balance sheet time and implementing operational improvements,” said Jarden analyst Adrian Allbon.

Number one customer, A2 Milk Company also continued to recover on the back of the upbeat dairy news. It rose 3.3% to $6.26 today – up more than 14% in the past five sessions.

Air NZ climbed 1.5% to $1.68, bringing its gain this month to almost 9%, while Auckland Airport fell 0.3% to $7.76. It has made a similar gain during September.

Forsyth Barr’s head of research Andy Bowley said in a note that despite easing travel restrictions, problems will linger in the near term with no clear timeline for opening NZ’s border.

“Airlines remain symptomatic, however, the gradual easing of border restrictions, predominantly across countries with higher vaccination levels will fuel the recovery,” he said.

The kiwi dollar was trading at 70.04 US cents at 3pm in Wellington, down from 70.23 cents yesterday.

Tags: Market Close