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MARKET CLOSE: NZ shares gain as Ryman hits record, index re-weightings lift F&P Healthcare

Monday 27th November 2017

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New Zealand shares rose as Ryman Healthcare climbed to a new record after last week's strong earnings result, while upcoming index reweightings stoked demand for Fisher & Paykel Healthcare while weighing on Contact Energy. 

The S&P/NZX 50 Index increased 45.81 points, or 0.6 percent, to 8,176.1. Within the index, 20 stocks gained, 23 fell, and seven were unchanged. Turnover was $212 million, with F&P Healthcare accounting for $57.8 million and Contact $25.1 million ahead of Thursday's MSCI index reweightings which investors anticipate will see the inclusion of the former and the departure of the latter. 

Ryman led the market higher, rising 5.6 percent to a record $10.35. The country's biggest listed retirement village operator has gained 12 percent since reporting an 8.4 percent increase in first-half profit and raising its interim dividend last Thursday. 

"It's following from its result last week which was pretty good, which just goes to show it's a great business that one," said Craig Stent, head of equities at Harbour Asset Management in Wellington. "As they get bigger and bigger it's increasingly harder, but with more sites in Australia and larger market, potentially it may be achievable" for Ryman to keep delivering strong earnings growth, he said. 

F&P Healthcare rose 2.6 percent to $13.16, while Contact fell 2.1 percent to $5.51 as investors prepare for the MSCI index reweightings. When a stock is included it means certain index-tracking investors, such as passive exchange-traded funds, have to buy the shares, with the reverse also true when a firm leaves it. 

Stent said that reweighting heightened turnover in those two stocks today and will likely see increased volatility ahead of the portfolio amendments. 

A weaker kiwi dollar continued to boost export-related stocks, including F&P Healthcare and milk marketer a2 Milk Co, which gained 1.7 percent to $8.47. 

Among other stocks to gain, Auckland International Airport rose 2.5 percent to $6.465, Summerset Gropu advanced 2.4 percent to $5.12 and Metro Performance Glass increased 2.1 percent to 96 cents. 

Telecommunications network operator Chorus was the worst performer on the day, falling 2.7 percent to $4. Other stocks to decline included NZX down 2.6 percent to $1.11, Scales Corp which dropped 2.1 percent to $3.81 and Air New Zealand, which fell 1.6 percent to $3.14. 

Infratil declined 1.2 percent, or 4 cents, to $3.26 after shedding rights to an interim dividend of 6 cents per share. 

Blue chip stocks Spark New Zealand slipped 0.8 percent to $3.615, Fletcher Building fell 0.4 percent to $6.83, Meridian Energy decreased 0.2 percent to $2.945, Mercury NZ increased 1.3 percent to $3.41 and Xero slipped 0.2 percent to $32.75. 

Vista Group International rose 1.9 percent to $2.75 after completing a two-for-one share split in an effort to enhance the cinema software firm's liquidity. 

Outside the benchmark index, Green Cross Health rose 1.2 percent to $1.76 after the medical services provider reported a 16 percent decline in first-half profit after a year-earlier gain wasn't repeated and a 6.9 percent gain in sales. 

Among companies reporting tomorrow, ERoad rose 0.3 percent to $3.36, Orion Health Group gained 4 percent to $1.05, Trilogy International declined 0.8 percent to $2.58 and Turners Automotive Group increased 0.3 percent to $3.16. 


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