by BusinessDesk
The S&P/NZX 50 Index closed down 31.63 points, or 0.23%, to 13,483.99, with 41.3 million shares worth $155m trading.
There were 66 gains and 74 falls on the main board.
Fisher and Paykel Healthcare (FPH), the market’s biggest stock with a 16% weighting on the S&P/NZX 50 index, dropped 26c to $37.94 but was off its lows for the day and the week.
US competition
Salt Funds managing director Matt Goodson said FPH had fallen on news that the US Food and Drug Administration had granted a “fast track” designation for Nasdaq-listed Incannex’s fixed-dose product for the treatment of obstructive sleep apnea (OSA).
Much of FPH’s respiratory product range is designed to offer relief for OSA sufferers.
“A tablet for sleep apnea would be the holy grail, which would obviously totally disrupt that particular industry,” he said.
“But it’s very early days to get concerned about that.”
Fletcher Building goes up
On the flipside, Fletcher Building (FBU) firmed 11c to $3.64 after the company said it continued to make progress on simplifying its funding structure, adding it had prepaid all outstanding US Private Placement notes on Nov 10.
Goodson said the message from FBU was “not hugely material”.
“But it does continue a broader theme this week of the market really starting to price in a better year for the New Zealand economy next year, and the stocks that have exposure to that.”
Goodson said second-tier data suggested 2026 would be better for the economy.
“So even though Fletcher Building has lots of its own particular issues, it could have a more helpful economic backdrop to deal with them,” he said.
Aged Care reforms
Retirement villages were in the spotlight in the Government's plans to reform the sector.
Among the changes will be a process for former residents to apply for early access to funds in situations of specific need.
One of the main operators, Summerset, fell 10c to $12.15.
Retirement village stocks have been strong in recent weeks on hopes that a better housing market next year will make it easier for them to sell their vacant units.
Goodson said the rule changes were more relevant to smaller operators, not to the listed operators with larger balance sheets.
“It’s sort of neutral to a minor negative,” he said.
Software firm Gentrack appeared to have become the plaything of small-cap, growth-momentum investors, dropping 59c, or 5.9%, to $9.40 after a volatile week.
Japanese influence
On the international scene, stocks have yet to respond to the prospect of higher interest rates in Japan, whose central bank has been signalling such a move.
Yields on Japan’s benchmark government bonds rose to their highest level since 2007 as investors fretted over Prime Minister Sanae Takaichi’s spending plans.
Goodson said rising Japanese yields could have implications for world markets.
“Japan has had inflation running above its target range for a considerable period, and it’s a concern that pops up from time to time in terms of what does this mean for the carry trade by foreigners,” Goodson said.
“Carry traders raise cheap funds in Japanese yen and invest in securities overseas, and Japanese themselves invest, unhedged, in overseas markets to try to get the higher yields that are available.
“It’s been one of the concerns – an argument for the bears – but it’s not something that’s really seems to have crystallised yet.”
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