F&P Healthcare bounces from 2-year low

New Zealand shares climbed on Wednesday as the benchmark equity index’s largest stock, Fisher & Paykel Healthcare, recovered from its recent two year low.

Wednesday, April 20th 2022, 6:43PM

by BusinessDesk

The S&P/NZX 50 Index rose 130 points, or 1.1%, to 11,966.19. Turnover was $164 million.

NZ investors were taking their lead from US markets which all bounced overnight on positive earnings reports.

“This further reinforced the view that corporate America is coming out of the pandemic strongly, taking the war and surging levels of inflation rather well,” said Greg Smith, head of retail at Devon Funds.

The Dow Jones, S&P 500 and Nasdaq Index were all up 1.5% or more, he said, with broader investor sentiment also boosted by a dip in the price of oil.

F&P Healthcare jumped 3.3% to $23 today as it bounced from a two-year low of $22.35 early this morning.

The hospital products manufacturer has performed well during covid as the pandemic drove massive demand for its products, but it recently signalled that era was ending as hospitalisation numbers fall around the world.

The stock has fallen more than 30% year-to-date as the share price normalises for the post-covid world. Morningstar has given the stock a fair value estimate of $24, while Jarden has a target price of $30.

F&P’s competitor ASX-listed ResMed also performed strongly today, up 3.2%, as did other healthcare stocks after a private hospital operator got a takeover offer from private equity firm KRR.

NZ King Salmon Investments also bounced from a low, up 7.6% to 49.5 cents, having lost almost half its market value recently after announcing a deeply discounted capital raise.

The fish farmer is facing an existential battle as climate change warms the waters where it raises salmon – a traditionally cold-water fish.

DGL Group climbed another 7% to $4.47 after upgrading its earnings guidance last week and surging 12%. The stock is now up almost 30% in the past five days.

Air New Zealand rights climbed 3.3% to 58.9c as rights trading entered its final week. Ordinary shares were up 1.2% at 85c, while Auckland International Airport was up 2.6% at $7.89.

There was little relief for speculative growth stocks that have been hit hard by climbing interest rates. Pacific Edge fell another 2.1% to 92c, Plexure Group fell 5.25 to 15c, and Eroad was down another 0.3% at $2.99.

The NZ dollar was trading at 67.62 US cents at 3pm in Wellington, up from 67.32 cents yesterday.

Jeffrey Halley, market analyst at Oanda, said both the Australian and NZ dollars benefited from the Japanese yen’s strength today.

The kiwi also rose against the Japanese currency, however, at 87.22 yen from 85.83 yesterday.

Tags: Market Close