Exporters F&P Healthcare, A2 enjoy weak kiwi; NZX rises

New Zealand shares were dragged higher as a weaker kiwi dollar lifted the value of export earnings for heavyweights Fisher & Paykel Healthcare and A2 Milk Co.

Monday, March 30th 2020, 6:28PM

by BusinessDesk

Grant Davies

The S&P/NZX50 rose 104.46 points, or 1.1 percent, to 9,661.19. Within the index, 27 stocks fell, 20 rose and three were unchanged. Turnover was $170.6 million.

The local market joined Australia's rally, where the S&P/ASX 200 Index was up 3.5 percent in late trading, with healthcare stocks driving the Australian market.

Grant Davies, an investment adviser at Hamilton Hindin Greene, said the increase on the NZX50 was driven by F&P Healthcare and A2 Milk, which are two of the country's biggest listed companies. F&P Healthcare rose 6.6 percent to $30.35 and A2 Milk rose 2.8 percent to $16.92.

“The two largest companies are both enjoying good days, as both exporters are benefitting from a weaker New Zealand dollar,” he said. Earlier this month, the kiwi dollar dropped below 60 US cents for the first time since 2009, and it traded at 60.22 cents at 5pm in Wellington.

F&P Healthcare has also been a beneficiary of increased demand for its respirators due to the covid-19 outbreak.

A2 Milk supplier Synlait Milk increased 4.2 percent to $5.75, while Fonterra Shareholders' Fund units fell 0.8 percent to $3.85.

Kathmandu Holdings led the market higher, rising 18.6 percent to $1.02. The outdoor clothing and equipment chain said on Friday it was chasing aggressive savings and was in talks with staff to continue on reduced hours and pay.

“Cutting costs left, right and centre has given investors some confidence they will be able to ride this storm out,” Davies said.

“In tough times, tough decisions need to be made.”

Refining NZ increased 11.3 percent to 69 cents, clawing back some recent losses.

Davies said the oil refinery operator may have convinced investors it had “managed to get the ball rolling” with its debt facilities, despite considerable turmoil in global fuel markets.

“There is plenty of water to go under the bridge, but there should be demand for a business such as theirs in New Zealand over the long term,” he said.

Argosy Property, which fell 15.8 percent last week, gained 1.8 percent at 86.5 cents.

Other property stocks were weaker. Kiwi Property Group dropped 2.2 percent to 88 cents, Stride Property declined 4.3 percent to $1.33 and Property for Industry fell 2.4 percent to $2.02.

Genesis Energy rose 3.9 percent to $2.41 and Contact Energy increased 3.1 percent to $5.64.

Internet infrastructure provider Chorus gained 2.8 percent to $6.73.

Skellerup Holdings fell 6.8 percent to $1.65 after announcing some facilities would operate at reduced levels or close temporarily during the next month, despite having essential service status.

Tourism Holdings fell 10 percent to $1.08, posting the biggest fall of the day. Auckland International Airport dropped 5.3 percent to $5.24 and Air New Zealand was unchanged at 90 cents.

Outside the benchmark index, furniture and appliance firm Smiths City was given an extra four weeks to make its next payment to lender ASB Bank as it negotiates with potential investors about a capital restructure. Its shares sank 42.5 percent to an all-time low 10 cents after coming off Friday’s trading halt.

“Hopefully they’ve got some bankers that are patient with them, particularly for their workforce because the last thing we need is a business of that size having to shut up shop permanently,” Davies said.

Abano Healthcare fell 22.1 percent to $1.80 after a planned private equity takeover was scrapped. The company has now closed all its Australian dental clinics due to the virus outbreak.

Hallenstein Glasson Holdings dropped 6.5 percent to $2.72 after the retailer reported a 3.8 percent decline in first-half profit, even as sales were up 5.7 percent. The clothing chain's board decided against paying a dividend due to the uncertain environment.

Tags: Market Close