F&P Healthcare pulls NZX 50 higher in late reversal

New Zealand’s S&P/NZX 50 index rallied late in the day to finish in positive territory, with Fisher & Paykel Healthcare doing the heavy lifting in a mixed response from exporters to the latest weakness in the kiwi dollar.

Infratil was among the day’s gainers as Japan’s Nikkei 225 hit a three-month high as artificial intelligence-linked firms including SoftBank Group and Tokyo Electron drove gains in Tokyo, following a stronger lead from Wall Street on Friday.

Companies exposed to residential property such as Fletcher Building and Summerset Group Holdings were generally weaker after ASB Bank economists predicted the housing market would continue to face headwinds for the rest of the year and forecast a slower recovery in prices next year.

And Bremworth declined after suitor David Ferrier called his partial takeover of the carpetmaker unconditional.

Holiday trading

The NZX 50 increased 18.53 points, or 0.1%, to 13,699.02, with 20 stocks gaining, 22 declining and eight unchanged. The S&P/NZX 20 index futures contract for December edged down 3 points to 7,559, with 100 lots traded for a value of $753,000, while the NZX 20 increased 0.1% to 7,509.25.

Turnover across the main board was $111 million, of which Fisher & Paykel Healthcare accounted for $25.2 million, as the country’s biggest listed company rose 1.3% to $46.57. The breathing mask maker agreed to sell 13 hectares in Drury, south of Auckland, to Health New Zealand for $45.3 million.

Stock markets across Asia were generally stronger, following Wall Street’s lead on Friday when softer-than-expected US jobs data cooled bets that the Federal Reserve would hike its benchmark rate later this month, with Japan’s Nikkei up 2.2%, South Korea’s Kospi gaining 0.5% and Australia’s S&P/ASX 200 index edging up 0.1% in late trading.

Infratil, which has been a local proxy for the AI trade given its investment in CDC Data Centres, rose 0.8% to $13.92.

“Our market is very much in school holiday mode, with trading pretty light really,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. “We had a reasonable finish to last week offshore, with stocks being more upbeat on weaker economic data and the fact that bets on a Fed hike have receded somewhat.”

The yield on New Zealand’s 10-year government bond slipped 1 basis point to 5.05% at 5pm in Auckland, compared with the US equivalent at 5.27% and Australia’s at 5.34%.

Soggy kiwi

Exporters were mixed as the kiwi dollar fell to 55.88 US cents at 5pm from 56.12 cents last week and declined to 80.57 Australian cents from 80.90 cents.

Vulcan Steel gained 3.6% to $6.89, posting the biggest gain on the NZX 50, while Serko advanced 3.3% to $1.26 and KMD Brands increased 1.3% to $1.885. Meanwhile, a2 Milk Co dropped 1% to $8.15, Scales Corp declined 2.3% to $6.50 and Fonterra Shareholders’ Fund units slipped 0.6% to $8.90.

Fletcher Building posted the biggest slide on the NZX 50, down 3.1% at $3.41, while Summerset declined 2.2% to $7.04 and Ryman Healthcare slipped 0.6% to $1.795, on the day’s biggest volume of 2.6 million shares.

ASB economists pared back their forecast for a recovery in house prices next year in their latest quarterly update, saying the property market continued to face headwinds this year and that they couldn’t rule out further declines in near-term prices.

Outside the benchmark index, Bremworth dropped 6.4% to 73 cents after suitor David Ferrier declared his partial takeover at 90 cents a share unconditional, securing acceptances totalling 59.3%, exceeding his offer for 44% of the company. Once the takeover was completed, Ferrier’s Mangawhai Collective would own 55% of the carpetmaker after scaling.

And ANZ’s monthly world commodity price index showed prices rose 0.6% in September, with beef and milk fat prices the only local raw materials to decline. In New Zealand dollar terms, the index jumped 2.8% in September.

Reporting by Paul McBeth. Image from Curious News.