NZX 50 gains as oil prices ease; retirement villages rally on resales growth

New Zealand’s S&P/NZX 50 index started the week on a stronger footing, with falling oil prices and bond yields spurring gains across much of Asia, with heavyweights Fisher & Paykel Healthcare and Infratil buoying the benchmark.

Retirement village operators Ryman Healthcare and Summerset Group Holdings paced gainers on the NZX 50 after both reported strong resales of occupation rights, despite the soft housing market, which has been a headwind for the sector in recent years.

Ebos Group neared a three-week high after Australian media reported the healthcare products maker could attract takeover interest at its depressed levels.

And across the Tasman, Crimson Education won the backing of Kip McGrath Education Centres’ board after hiking its takeover bid to 75 Australian cents a share.

On the up

The NZX 50 rose 78.27 points, or 0.6%, to 13,827.62, with 25 stocks gaining, 20 declining, and five unchanged. The S&P/NZX 20 index rose 0.5% to 7,569.37, with the futures contract untraded.

Turnover across the main board was $124.2 million, of which F&P Healthcare accounted for $20.1 million as it rose 1.6% to $48.44, while Infratil gained 1.8% on a turnover of $11.6 million and Auckland International Airport increased 1.4% to $8.44 on a turnover of $11.3 million.

Local blue chips joined the generally upbeat mood across Asia as oil prices eased despite the heightened tensions in the Middle East after the Houthi attacks on Saudi Arabia’s Riyadh airport. Brent crude oil futures fell 1.6% to US$103.09 a barrel at 5pm in Auckland, while the yield on New Zealand’s 10-year government bond slipped 3 basis points to 5.03%, compared with 5.24% for the US equivalent.

Japan was closed for a public holiday, while Hong Kong’s Hang Seng nudged up 0.2% and Australia’s S&P/ASX 200 index gained 0.8%. South Korea’s Kospi dropped 3.2%.

Ryman led the NZX 50 higher as it jumped 7% to $1.83 after the retirement village operator said the occupancy rate rose to 94% in the September quarter from 91.7% a year earlier, while resales of occupation rights climbed 14%. New sales were down 28% in line with the planned reduction in inventory.

Summerset climbed 1.7% to $6.79 as the retirement village operator reported similar growth in resales of occupation rights, up 36% in the September quarter, with new sales falling 28% from a year earlier.

“We’re seeing some encouraging signs from both Ryman and Summerset, with Ryman’s resale volumes at an eight-quarter high and Summerset’s resales 36% ahead of last year,” said Jeremy Sullivan, an investment adviser at Craigs Investment Partners. “Both of them had resales momentum despite the housing market – the demographic demand hasn’t disappeared, but people aren’t holding out for top dollar anymore.”

Oceania Healthcare increased 1.5% to 66 cents.

Ebos Group gained 4.9% to $19.90 after The Australian’s DataRoom column reported the healthcare products maker’s share price slump had prompted some investment bankers to opportunistically shop the company around to prospective buyers.

Contact Energy posted the biggest decline on the NZX 50, falling 2.9% to $8.51, with the power companies broadly weaker. Meridian Energy declined 0.9% to $5.48 and Mercury NZ slipped 0.4% to $6.73, while Genesis Energy increased 0.4% to $2.47.

Kiwi Property Group decreased 0.6% to 90 cents as the commercial landlord said it was considering an offer of seven-year green bonds. New Zealand’s seven-year swap rate fell 4 basis points to 4.53% today.

Spark New Zealand dropped 1.8% to $1.945 with 3.3 million shares changing hands, the most for the day. Telecommunications carriers across Asia followed their US and European peers, which dropped on Friday after SpaceX secured spectrum, meaning its Starlink Mobile service could bypass cell towers in some areas.

Broadband network operator Chorus decreased 0.1% to $8.39.

Stock market operator NZX was unchanged at $1.45 after the National Business Review reported that the rumoured Metlifecare initial public offering could be revisited next year.

Outside the benchmark index, Tāiko Critical Minerals was unchanged at 21 cents after the would-be miner finished drilling to test the resource at the Barrytown project on the West Coast, with 21% of the 35 million tonnes of mineral sands assessed to be heavy minerals. The company said it would now start on a definitive feasibility study.

Eroad increased 0.5% to 99 cents as David Leach took up the reins as chief executive, letting John Scott revert back to a non-executive chair position. Separately, director Sara Gifford decided to step down from the board at the start of December.

Bremworth tumbled 6.9% to 68 cents after David Ferrier completed his partial takeover of the carpetmaker, securing a 55% controlling stake paying 90 cents per share.

Across the Tasman, Kip McGrath Education Centres gained 3.8% to 69 Australian cents after the recommended shareholders accept Crimson’s increased offer of 75 cents per share, with the offer closing on Oct 19.

The kiwi dollar traded at 56.07 US cents at 5pm from 56.18 cents last week.

Reporting by Paul McBeth. Image from Curious News.