F&P Healthcare leads NZX50 lower amid fears US probe will lead to tariffs

Fisher & Paykel Healthcare led New Zealand’s S&P/NZX 50 index lower as a US commerce department probe into medical devices raised fears that the firm might face new tariffs, slicing almost $893 million from the value of the country’s biggest listed company.

Meanwhile, Fonterra Cooperative Group delivered another strong year as global demand for milk products helped boost a 15% lift in annual revenue with a slightly higher dividend.

National carrier Air New Zealand held its annual meeting in Auckland, where chief executive Greg Foran gave his swansong before he departs the airline, outlining the difficulties facing the company while it waits for international travel to start perking up.

And stock markets across Asia were marginally stronger despite a soft lead from Wall Street, with Australia’s S&P/ASX 200 index up in late trading as miners including BHP and Rio Tinto followed copper prices higher after Freeport-McMoran’s woes at its major mine in Indonesia.

Great uncertainty

The NZX50 fell 27.52 points, or 0.2%, to 13,153.79, with 17 stocks declining, 26 gaining, and seven unchanged. Turnover was $143.1 million, of which F&P Healthcare accounted for $35.1 million as it led the benchmark lower.

The medical device maker dropped 4% to $36.28 as investors were spooked by the US Department of Commerce launching an investigation into whether imported robotics, industrial machinery and medical devices threatened national security, which may be a precursor to a round of tariffs, as has been the case for other sectors.

“It’s clear as mud how it will end up,” said Matt Goodson, a managing director at Salt Funds Management. “Fisher & Paykel trades at quite high multiples as well, so it’s more vulnerable to a bit of a correction.”

Scott Technology, which exports automation and robotics systems to the US, declined 1.2% to $2.45, although sitting outside the NZX50 and with a cornerstone shareholder the stock is less liquid with just 303 shares traded today.

New Zealand’s tech companies followed Wall Street lower, with Serko down 1.5% at $2.66, Gentrack falling 1% to $10.20 and Vista Group International sliding 2% to $2.98.

Dairy bonanza

Fonterra Shareholders’ Fund units fell from yesterday’s record close to end the day down 1.1% at $7.81, while Fonterra Cooperative Group’s farmer-only shares rose 1.7% to $6.10 – their highest since September 2013 – after the dairy exporter lifted annual sales 15% to $26 billion, while profit slipped 4% to $1.08 billion from a similarly strong year in 2024.

The dairy group declared a final dividend of 35 cents per share, taking the annual return to 57 cents, up from 55 cents the year earlier, and said it’s targeting a $2 per share capital return from the sale of the Mainland consumer business to France’s Lactalis, with the final decision to be made once the deal is unconditional.

Goodson said the dairy sector could be heading for a very positive outlook, with the strength in milk prices persisting despite low grain prices, which typically encourages greater production in the Northern Hemisphere’s grain-fed herds.

Infant formula firm The a2 Milk Co fell 1% to $9.65, while outside the benchmark index, Synlait Milk declined 2.1% to 68.5 cents. Rural services firm PGG Wrightson dropped 2.3% to $2.16 and Allied Farmers was unchanged at 75 cents, while NZ Rural Land Co rose 3% to $1.02.

Spark New Zealand was the most heavily traded company on the day with a volume of almost 4 million shares as it slipped 0.4% to $2.35.

Meanwhile, KMD Brands posted the biggest gain on the day, up 6.1% at 26 cents, with Forsyth Barr analyst Paul Laxton Koraua raising his price target on the retailer by 7 cents to 37 cents after the company reported earnings at the bottom end of guidance on Wednesday.

“While sales were better than expected, this was achieved through giving up gross margin in the final quarter of the year to clear inventory,” Laxton Koraua said in a note to clients. “We think this was sensible, with net debt of $53 million coming in below its $70 million guidance.”

Fletcher Building gained 2.6% to $3.16, while Ryman Healthcare advanced 2.1% to $2.40 and Infratil increased 2.1% to $12.65.

Grounded jets

Air New Zealand was unchanged at 59.5 cents after reiterating the tough outlook for airlines at its annual meeting, where chief executive Greg Foran said the tight capacity from grounded jets isn’t expected to start easing until the second half of the 2026 June year when new Boeing 787s start arriving, with a gradual recovery expected in the following two years.

Outside the benchmark index, AFT Pharmaceuticals jumped 6.5% to $2.80 after the maker of Maxigesic painkillers reaffirmed its March 2027 revenue target of $300 million, while NZME was unchanged at $1.095 after director Jim Grenon lifted his stake above 18% buying another 1 million shares on market.

Stock markets across Asia were generally stronger as they shrugged off Wall Street’s soft tone, with the ASX200 up 0.1% in late trading as mining stocks were buoyed by a rally in copper prices, while Japan’s Nikkei 225 index nudged up 0.1% and Hong Kong’s Hang Seng increased 0.4%.

The kiwi dollar traded at 58.24 US cents at 5pm in Auckland from 58.10 cents at 7am and down from 58.61 cents yesterday. It fell to 88.28 Australian cents from 88.53 cents.

Reporting by Paul McBeth. Image from Jake Kling on Unsplash.