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MARKET CLOSE: NZX 50 rises to record, led by F&P Healthcare, Ryman as dividends loom

Wednesday 6th June 2018

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New Zealand shares rose, pushing the S&P/NZX 50 Index to a record, as Fisher & Paykel Healthcare extended its gains and investors picked up stocks that are carrying a dividend payment including Ryman Healthcare, Mainfreight and Arvida Group.

The NZX 50 rose 56.41 points, or 0.6 percent, to 8,813.45. Within the index, 24 stocks rose, 19 fell and seven were unchanged. Turnover was $165 million.

F&P Healthcare rose 3.5 percent to $14.40, bringing its gains the past week to about 10 percent. On May 28 the company posted a record profit of 190.2 million and said it would beat that in the current year even while planning increased capital expenditure. The company sheds its final dividend of 12.5 cents a share on June 21.

"There was some scepticism about (Healthcare's) growth prospects and expenditure but investors have got their heads around the fact that it is investing for growth," said Peter McIntyre, an investment adviser at Craigs Investment Partners. "It's an easily understood, long-term story. A quality company."

Ryman, which pays a 10.9 cent final dividend tomorrow, rose 2.1 percent to $11.94. Among the other retirement village operators, Metlifecare gained 3.2 percent to $6.22. Arvida, which goes ex-dividend for a 1.56 cent final payment on June 12, rose 1.6 percent to $1.30.

Mainfreight fell 1.2 percent to $27.38. The transport company sheds its final dividend of 26 cents on July 12.

"There's a lot of stock gainers today that are carrying dividends - investors are seeking to secure that income," McIntyre said. "Upbeat flows from offshore" were also helping lift the market, he said. Benchmark indexes are stronger today in Japan, Hong Kong and Australia. The retirement village sector was also underpinned by a very strong outlook, he said.

A2 Milk fell 0.9 percent to $10.90, having been among the leading gainers yesterday. The milk marketer has fallen from a peak of $14.62 in late February on concern about increased rivalry in the Chinese market and on disappointment margins haven't grown as fast as sales.

McIntyre said the company's recent guidance, while it was for growth, "was not quite where the market had expected."

He said A2 "is a growth story but there's more competition coming through" and the stock was also popular to short, which is a bet on the price falling, as it tended to be volatile. Synlait Milk fell 2.2 percent to $10.90.

Kathmandu declined 1.7 percent to $2.38.

Fletcher Building rose 1.7 percent to $6.69 and McIntyre said it has been performing well "considering where the company has been in the past 3-4 months" and bearing in mind it raised new capital at $4.80 a share. "It is still reasonable value as a turn around story."

NZX fell 0.9 percent to $1.12 after the market operator's monthly metrics showed share trading continued to rise in May. Year-to-date the total number of trades is up 79 percent to 1.3 million and the total value traded is up 5.3 percent to $17 billion, NZX said today.

Outside the benchmark index, New Zealand King Salmon Investments rose 0.9 percent to $2.25 after saying full-year earnings are likely to be "at the upper end or slightly above" guidance, although a hot summer has curbed expectations for volumes available for sale in both 2018 and 2019.


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