NZ shares outperform as omicron looms over Asia

New Zealand's sharemarket was the standout across Asia, with Fisher & Paykel Healthcare the top performer as the omicron variant of covid-19 keeps investors nervous about another round of lockdowns.

Monday, December 20th 2021, 7:20PM

by BusinessDesk

The S&P/NZX 50 Index rose 48.51 points, or 0.4%, to 12,766.45. Turnover was relatively quiet at $116.8 million.

The local market outperformed Asia, with US stock futures pointing to a weak start of the week for Wall Street as some European policymakers take steps to clamp down on the spread of omicron with new lockdown measures.

“Futures don’t look good in the US – they’re showing a negative session – but we’re the only exception across the Asia Pacific today,” said Peter McIntyre, an investment adviser at Craigs Investment Partners.

“There’s potential omicron’s going to be here for a while.”

F&P Healthcare led the local market higher, up 3% at $32.20, as investors gauge whether or not the respirator maker will continue to get a boost from the virus.

The exporter, which derives about half its revenue in US dollars, also got a tailwind from a weaker currency. This also propped up other exporters, such as fishing company Sanford, which rose 2.3% to $4.88. Outside the benchmark index, ikeGPS rose 3.8% to 83 cents, AFT Pharmaceuticals was up 2.4% at $4.30.

The NZ dollar was weaker across the board as traders flocked to the greenback on growing expectations the Federal Reserve will raise interest rates more aggressively next year. The kiwi fell to 67.34 US cents at 3pm in Wellington from 67.98 cents last week, with the trade-weighted index down to 72.50 from 72.99.

Omicron fears weighed on companies more exposed to the pandemic. Air New Zealand fell 2.6% to $1.49, Vista Group International was down 2.3% at $2.12, and SkyCity Entertainment Group declined 2.3% to $3.01.

Retailer Kathmandu posted the day’s biggest decline, falling 2.7% to $1.47

McIntyre said the prospect of rising interest rates will continue to be the primary driver for stock markets heading into the new year, although companies paying reliable dividends, such as utilities and property investors, will remain attractive given an accelerating pace of inflation is eating into real returns on bonds.

Trustpower increased 1.7% to $7.28, Auckland International Airport advanced 1.6% to $7.59, and Goodman Property Trust rose 1.6% to $2.62.

Winton Land rose 3.9% to $3.72 in its second day of trading, having sold $350m of new shares at $3.89 in an initial public offering.

Tags: Market Close