NZX50 dips as heavyweights F&P Healthcare, Auckland airport decline

New Zealand’s S&P/NZX 50 index dipped for a second day, with heavyweights Fisher & Paykel Healthcare and Auckland International Airport the major drags on the local bourse, in a broadly softer day for risk-sensitive assets across Asia.

Infratil gained as it shrugged off declines among artificial intelligence-related companies across Asia, with South Korea’s Kospi slumping on renewed fears about the capital spending programmes ahead of Micron Technology’s quarterly earnings in the US on Wednesday.

Interest rate-sensitive retirement village operators Summerset Group Holdings, Oceania Healthcare and Ryman Healthcare advanced as local swap rates declined and ANZ followed Westpac NZ in lowering some home loan and term deposit rates.

And Tourism Holdings nudged higher on an unusually heavy day of trading, with the rental campervan operator’s suitor BGH Capital and the Trouchet family currently doing due diligence on the business.

Holding pattern

The NZX50 slipped 10.28 points, or 0.1%, to 13,435.77, with 17 stocks declining, 25 gaining and eight stocks unchanged. The S&P/NZX 20 index futures contract for June decreased 0.3% to 7,567 with 40 lots traded for a value of $303,000, with the NZX20 dipping 0.1% to 7,601.3.

Turnover across the main board was $144.2 million, of which F&P Healthcare accounted for $30.2 million as it fell 1.6% to $37.61.

Stock markets across Asia followed Wall Street’s tech-heavy Nasdaq lower as renewed fears about the pace of AI spending weighed on the likes of Alphabet and Amazon in overnight trading, with Australia’s S&P/ASX 200 index down 0.3% in late trading, while Japan’s Nikkei 225 dropped 1.7% and South Korea’s Kospi sank 6.6%.

F&P Healthcare and Auckland airport were among the bigger drags on the NZX, with the airport operator falling 1.9% to $8.36.

Serko posted the steepest decline on the NZX50, falling 4% to $1.545, with software firms remaining under pressure across the Tasman. The sector was more mixed on the NZX, with Vista Group International gaining 3.9% to $2.39 and Gentrack advancing 0.8% to $3.71.

Exporters were mixed as the kiwi dollar extended its decline, trading at 56.93 US cents at 5pm in Auckland from 57.28 cents yesterday. Logistics group Mainfreight dipped 1% to $60.10, while fishing group Sanford fell 1.7% to $7.15 and rubber goods maker Skellerup Holdings decreased 1.4% to $6.41.

Milk run

The a2 Milk Co extended its rally for a fifth session, gaining 1.9% to $8.41. Forsyth Barr analysts reaffirmed their ‘neutral’ rating on the stock while trimming the target price by 80 cents to $9.70, saying concerns about its supply chain disruptions and US product recall were easing.

“We remain constructive on a2 Milk’s medium-term earnings outlook, supported by improving supply conditions, vertical margin capture from Pokeno, and further market share gains supported by new product launches,” analysts Will Twiss and Matt Montgomerie said in a note to clients. “However, with a2 Milk trading at circa 26 times our revised FY27 earnings per share, slightly below history, and our earnings forecasts now below consensus over the next two years, the margin of safety is modestly too narrow to justify a more positive investment stance at this stage.”

Retirement village operators were broadly stronger, with ANZ’s lower mortgage and term deposit rates providing a tailwind for the interest rate sensitive sector. Summerset rose 3.5% to $8.80, Oceania gained 3.3% to 78 cents and Ryman gained 1.8% to $2.29.

Kiwi Property Group gained 0.5% to 93.5 cents after the mixed-use commercial landlord reaffirmed earnings and dividend guidance at today’s annual meeting, while Argosy Property increased 0.5% to $1.065 after saying the global environment continued to keep the local market uncertain.

Retailer KMD Brands posted the biggest gain on the NZX50, up 4% at 7.9 cents.

Tourism Holdings was the most heavily traded stock on the day, with a volume of 3.2 million shares changing hands as it gained 0.4% to $2.56. Two trades at $2.55 a share accounted for almost all of that volume.

Reporting by Paul McBeth. Image from Curious News.