NZX 50 gains this week as F&P Healthcare tests new territory

New Zealand’s S&P/NZX 50 index rose this week, with Fisher & Paykel Healthcare hitting new records as the country’s biggest listed company extended its rally with a soft kiwi dollar adding a tailwind for the medical device maker.

Gentrack posted the biggest gain of the week, while retirement village operators Summerset Group Holdings, Oceania Healthcare and Ryman Healthcare were at the bottom of the leaderboard as elevated bond yields and a persistently soft housing market continued to weigh on the sector.

KMD Brands led the NZX 50 higher on Friday as a report across the Tasman named Billabong-owner Authentic Brands as joining the bidding war for the outdoor equipment and surfwear chain, while Ryman Healthcare bounced from its 17-year low.

Asian markets were mixed as details about OpenAI’s revenue weighed on South Korea’s chipmakers, while Australian shares advanced as Firmus Technologies pulled its ASX listing as investors pushed back on pricing.

Friday highlights

The NZX 50 rose 57.5 points, or 0.4%, to 13,749.35 on Friday, taking the weekly gain to 0.5%.

F&P Healthcare was up 3.7% this week, its best since June, with the exporter’s upgraded earnings guidance in August assuming the kiwi dollar trading around 59 US cents and 51 euro cents. The New Zealand dollar traded at 56.18 US cents at 5pm in Auckland from 56.04 cents yesterday, and was at 50.05 euro cents from 50.01 cents.

“US dollar weakness was the main theme of our last NZD Update, which was published around two weeks before the DXY index bottomed out, on 9 September,” ANZ senior strategist David Croy said in a note. “Since then, it has been one-way traffic in the opposite direction as, among other things, higher oil prices and sovereign debt fears have led to safe-haven buying of the US dollar.”

Gentrack posted the biggest weekly gain on the NZX 50, up 13%, while Tower climbed 7.1% after upgrading its earnings guidance.

Meanwhile, Oceania dropped 8.5% in the biggest decline on the benchmark index, while Summerset dropped 7.2% and Ryman was down 5.3%, with economists predicting no respite in the housing market this year.

On Friday, 25 stocks gained on the NZX 50, 23 fell and two were unchanged. The S&P/NZX 20 index futures contract for December increased 0.3% to 7,535, with 210 lots traded for a value of $1.6 million, while the NZX 20 advanced 0.5% to 7,531.54.

Turnover across the main board was $125.2 million, of which F&P Healthcare accounted for $16.7 million as it rose 0.6% to $47.70, and hit a new record of $47.99 during the session.

More details

Infratil fell 1.4% on a turnover of $16.3 million, with investors mixed on the artificial intelligence trade after reports that OpenAI’s annualised revenue of US$50 billion in the September quarter missed earlier targets. The ChatGPT developer was now targeting a US$70 billion annual run-rate by the end of the year, Bloomberg reported.

Stock markets across Asia were mixed, with South Korea’s Kospi down 2.6% in late trading and Japan’s Nikkei 225 falling 0.5%, while Hong Kong’s Hang Seng climbed 1.1%.

Australia’s S&P/ASX 200 index rose 0.5% in late trading, with Firmus pulling its planned initial public offering after investors pushed back on the proposed pricing. The neocloud AI infrastructure firm pulled the planned ASX IPO, and would work on a Nasdaq listing instead, according to an Australian Financial Review report.

KMD posted the biggest gain on the NZX 50, up 3.5% at $1.93 after The Australian’s DataRoom reported Authentic Brands joined three other suitors in talks with the retailer about a potential takeover. Briscoe Group, which owns a small stake in KMD, fell 3.1% to $4.35, the biggest decline for the day.

Gentrack rose 2.2% to $4.12 and a2 Milk Co advanced 2.2% to $8.30, while Oceania declined 3.5% to 65 cents and Serko fell 2.9% to $1.17.

Argosy Property rose 2% to $1 after Forsyth Barr analysts said the listed real estate sector could see some merger and acquisition activity due to the discounts that companies were trading at relative to their net asset values, and posited a scenario of Argosy merging with Stride Property, which was down 2.8% at $1.05 on the day.

Spark New Zealand was the most heavily traded stock on the day, down 1.5% at $1.98 on a volume of 3.2 million shares.

Outside the benchmark index, NZ Rural Land Co was unchanged at 93 cents after the agricultural landlord agreed to sell five orchards in Hawke’s Bay that it owns 75% of to a partnership managed by Craigmore Sustainables for $18.9 million. Allied Farmers, which owns NZ Rural Land Co’s management contract, was unchanged at 61 cents.

NZME slipped 0.5% to $1.04 after the Australian Financial Review reported a group of shareholders led by Roger Colman holding 8% of the media group called for the removal of chief executive Michael Boggs. The board rejected the open letter, saying it was pleased with the company’s performance.

Reporting by Paul McBeth. Image from Curious News.