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MARKET CLOSE: NZ shares fall; retirement stocks under pressure on housing fears

Tuesday 9th April 2019

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New Zealand shares fell for a fifth session as retirement village operators Summerset Group and Metlifecare suffered amid fears a slowing property market will dent their fortunes. 

The S&P/NZX 50 Index declined 19.78 points, or 0.2 percent, to 9,787.30. Within the index, 16 stocks fell, 24 gained, and 10 were unchanged. Turnover was $143.9 million. 

Summerset led the market lower, down 3.8 percent at $5.55 on a volume of 1.2 million shares. Its 90-day average is 281,000. Metlifecare fell 3.2 percent to $4.58 and Ryman Healthcare declined 2.5 percent to $11.70. 

Last week, Summerset warned that first-quarter unit sales were down in part because of slowing property markets in Auckland and Christchurch. Rapid gains in house prices in recent years have been a tailwind for the sector, which is busy building new villages in anticipation of the needs for an ageing population. 

"Uncertainty around the housing market is coming home to roost with a lot of the premium starting to disappear for some of those stocks, particularly Metlifecare and Summerset," said Grant Davies, an investment adviser at Hamilton Hindin Greene. 

"If you look at the two stocks in the sector not as exposed to property, Arvida is holding its ground where it is and Oceania is also holding its ground reasonably solidly." 

Arvida was unchanged at $1.30, while Oceania Healthcare, which is outside the benchmark index, slipped 1 percent to $1. 

The NZX50 has been coming off the boil during the past week after hitting a record and toying with the 10,000 level. The large number of listed companies paying reliable dividends has been an attraction for investors in search of yield in a low interest rate environment. However, since most of the companies that reported in February have shed rights to their dividends, that appeal has dulled. 

Mercury NZ fell 0.8 percent to $3.88 on a volume of a million shares. Chair Joan Withers yesterday announced her plans to retire from the board at this year's September annual meeting. 

Contact Energy declined 0.9 percent to $6.75, on a volume of 1.4 million, while Genesis Energy was down 0.2 percent at $3.085. 

Of those companies reporting next month, Mainfreight decreased 0.6 percent to $35.90. Fisher & Paykel Healthcare declined 1.3 percent to $15.05. 

Spark New Zealand was the most traded stock on a volume of 3.2 million shares, less than its 6 million 90-day average. It decreased 1.2 percent to $3.65. Air New Zealand increased 0.2 percent to $2.745 on a volume of 2.2 million shares and Kiwi Property Group fell 0.7 percent to $1.475 on a volume of 2.3 million. 

Of other companies trading on volumes of more than a million shares, Argosy Property increased 0.4 percent to $1.27, Sky Network Television fell 0.8 percent to $1.26, SkyCity Entertainment Group rose 2 percent to $4.03, Z Energy increased 0.8 percent to $6.39, and Auckland International Airport was down 0.1 percent at $8.04. 

Tourism Holdings posted the biggest gain, up 4.6 percent at $5.19 on a smaller volume than usual of 88,000 shares. The rental RV operator's joint venture with Thor Industries - TH2 - announced the merger of its CamperMate and RoadTrippers businesses with Australia's GoSeeAustralia and Outdoria to create a single trans-Tasman entity. 

Pushpay Holdings rose 2.3 percent to $3.56 on a smaller than usual volume of 222,000 shares. Gentrack Group increased 1.3 percent to $5.52 on a slightly larger volume than average of 104,000. 

Outside the benchmark index, Paysauce jumped 27 percent, or 0.3 of a cent, to 1.4 cents, after more than doubling March quarter recurring revenue. 

Green Cross Health was unchanged at $1.15 after its 14 percent gain since April 3 attracted a 'please explain' from the stock market operator. Green Cross had nothing to report. 


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