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MARKET CLOSE: NZ shares fall amid index reweightings; F&P Health gives up more gains

Wednesday 29th May 2019

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New Zealand shares fell in heavy trading as large investors rejigged their portfolios for a semi-annual index review. Fisher & Paykel Healthcare gave up more gains after yesterday's record profit.

The S&P/NZX 50 Index fell 24.39 points, or 0.2 percent, to 10,123.32. Within the index, 21 stocks fell, 23 rose, and six were unchanged. Turnover was $264.4 million, of which Auckland International Airport accounted for $48.3 million. 

Trading was busier than usual with an extended session to allow for semi-annual reweightings of MSCI equity indices. Meridian Energy was the most traded stock on a volume of 6.5 million, more than its 1.3 million 90-day average. It fell 0.5 percent to $4.29. 

Spark New Zealand fell 0.9 percent to $3.765 with 5.8 million shares traded, in line with its usual volume. Auckland International Airport fell 1.1 percent to $8.525 on a volume of 5.7 million shares, compared to its 1.2 million average. 

F&P Healthcare led the market lower, down 4 percent at $15.43 on a bigger volume than usual of 1.9 million shares. The breathing mask maker has been one of the top performers this year, but gave up some of those gains for a second day having yesterday reported a record profit. 

Mainfreight posted the biggest gain on the day, up 4 percent at $37.45 on a volume of 185,000 shares, more than four times its average of 41,000. The global transport and logistics firm lifted annual profit 28 percent. 

Greg Smith, head of research at Fat Prophets, said the two companies reported "pretty good results", and while they're different businesses, the different reactions showed the market wasn't a "one-way street". 

 Arvida Group increased 0.8 percent to $1.31 after reporting strong earnings growth from its new village acquisitions and resales of existing occupation rights. Smith said the bulk of the company's business was outside Auckland which insulated it from a cooling property market in the country's biggest city. 

Synlait Milk rose 0.9 percent to $9.24 after raising its forecast farmgate payment to its suppliers and projecting a higher payout for the upcoming season. A2 Milk, which counts Synlait as a supplier, rose 1.4 percent to $15.85 on a volume of 1.1 million shares. 

Air New Zealand fell 2.2 percent to $2.65 on a volume of 1.4 million shares. Yesterday it downgraded its earnings guidance on increased jet fuel prices and signalled a major capital spending programme on new Boeing planes. 

Of other companies trading on volumes of more than a million shares, Kiwi Property Group rose 0.3 percent to $1.565, Ryman Healthcare fell 0.5 percent to $11.40, Infratil increased 0.5 percent to $4.32, Contact Energy decreased 0.4 percent to $7.33, and Chorus rose 3.8 percent to $5.78. SkyCity Entertainment Group was down 0.5 percent at $3.81, Mercury NZ slipped 0.8 percent to $3.86 and Precinct Properties New Zealand fell 0.6 percent to $1.66. 

Outside the benchmark index, Eroad was unchanged at $3.09 after reporting increased revenue and underlying earnings. The annual loss widened on increased R&D spending and the adoption of new accounting rules. 

The most traded debt security was Vector's 2025 bonds which pay annual interest of 3.45 percent. The notes last traded at an unchanged yield of 3.18 percent on debut. Vector shares increased 0.8 percent to $3.76. 


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