F&P Healthcare gives NZX 50 an end of month surge

New Zealand’s benchmark equity index finished the month with a flourish as Fisher & Paykel Healthcare shares surged, bringing the index’s November gain above 5 percent.

Monday, November 30th 2020, 8:00PM

by BusinessDesk

The S&P/NZX 50 Index rose 128.69 points, or 1 percent, to 12,768.52. Within the index, 27 stocks fell, 16 rose and seven were unchanged. Turnover was $515.8 million, much higher than usual to accommodate the semi-annual review of the MSCI equities indices.

F&P Healthcare led the market, up 5.8 percent at $35.92, holding an elevated share price even amid a rotation away from the best performing stocks.

Matthew Goodson, a director at Salt Funds Management, said potential vaccines were a double-edged sword for the medical device manufacturer.

“While the enormous growth in their respiratory humidification sales into hospitals may slow, covid has been a headwind for take up in their sleep apnoea business as people haven’t been out getting tested,” he said.

The stock is down just 0.2 percent this month, even as stocks hurt by covid have seen significant rallies.

It has been an exceptional month for Fletcher Building and Air New Zealand which have climbed 38 percent and 27 percent respectively, this November. Today both stocks gave back a little of that gain, Fletcher fell 2.3 percent to $5.60 and Air New Zealand declined 2.2 percent to $1.82.

“The month is very notable for its shift into cyclicals globally, with New Zealand not missing out,” Goodson said, referring to companies linked to the economic cycle. “Fletcher Building is perhaps the bellwether cyclical stock, over many years it has waxed and waned with the cycle.”

Another covid-winner was caught up in the rotation, Pushpay Holdings fell almost 25 percent this month. The church management app was also hindered by a half-year trading update showing the firm hadn’t added any new customers, despite growing its profit considerably.

The stock closed at $1.77 after completing a four-for-one share split, and were up 1.7 percent today when adjusted for the division.

Meridian Energy climbed 4.1 percent to $6.43, continuing to benefit from the Tiwai Point aluminium smelter staying open and buoyed by investors buying clean energy exchange traded funds after Joe Biden won the US presidency, Goodson said.

Heartland Group Holdings rose 2.8 percent to $1.45 after chief executive Jeff Greenslade told the annual shareholders' meeting that net profit for the four months ended October was tracking ahead of expectations. The stock is up more than 6 percent this month, although still down about 20 percent year-to-date.

Kathmandu chief executive Xavier Simonet unexpectedly resigned to head up the Australian Trade and Investment Commission. Investors were sad to see him go, pushing the share price down 6.2 percent to $1.22.

Simonet has been at the helm for five years - capping a management career in the fashion retail industry - but originally studied law, economics and public administration at the Institut d’Etudes Politiques de Paris, a university which produced five of the past seven French presidents.

Outside of the top 50 stocks, QEX dropped 8.6 percent to 37 cents after it reported a half-year net loss of $5.9 million. The loss would’ve been just $1.5 million if it weren’t for inventory that went missing, and is presumed stolen, from a Shanghai-based warehouse.

Chief executive Ronnie Xue said an investigation involving China Customs, authorities and a specialist legal team is ongoing, and that the second half would be “challenging”.

In currency markets, the US dollar continued to drift lower as investors become more confident in a global economic recovery next year as vaccines are rolled out, said Nick Smyth, an interest rate strategist at BNZ.

The kiwi dollar was trading at 70.27 US cents at 5:30pm in Wellington, up from 70.13 cents on Friday and up 6 percent across November — its best month in seven years according to Reuters news agency.

The trade-weighted index was at 74.05 at 5:30pm, from 73.94 yesterday. The kiwi traded at 95.08 Australian cents from 95.14 cents, 73.02 yen from 72.90 yen, 58.71 euro cents from 58.82 cents, 52.72 British pence from 52.45 pence, and 4.6291 Chinese yuan from 4.6125 yuan.

Tags: Market Close