Market close: NZ shares flat as index changes go through

Fisher and Paykel Healthcare shares climbed 70c or 3.44 per cent to $21.05

The New Zealand sharemarket took a well-earned breather after two weeks of incredible volatility – and changes in the prestigious MSCI indices affected three stocks.

The S&P/NZX 50 Index again had its ups and downs during the day but finished reasonably flat, closing at 11,168.18 – down 9.18 points or 0.08 per cent after hitting a noon low of 11,086.79. The index was down nearly 4 per cent for the week.

There were 60 gainers and 76 decliners across the whole market on volume of 42.7 million share transactions worth $146.91m. Individual trading was dominated by Ryman Healthcare and Ebos Group, which had different outcomes in the MSCI changes.

Ryman Healthcare, gaining 14c to $9.39 on trade worth $11.86m, is being removed from the MSCI Large Cap Index at the end of this month following its semi-annual review.
There could be more than $26m worth of Ryman shares traded before May 31 as passive investment funds continue to offload their holdings.

It was thought that Ebos Group could replace Ryman in the global index but didn't quite meet the criteria and Ebos was sold off – falling 98c or 2.39 per cent to $39.99 on trade worth $15.52m.

The New Zealand market now has only five stocks in the MSCI index – Fisher and Paykel Healthcare, up 70c or 3.44 per cent to $21.05; Spark gaining 6.5c to $4.90; Auckland International Airport increasing 20c or 2.82 per cent to $7.30; Meridian down 14c or 3.04 per cent to $4.47; and Mercury up 1c to $5.65.

The Warehouse Group is joining the MSCI Small Cap Index and rose 24c or 7.62 per cent to $3.39. The Warehouse told the market it is considering whether to re-enter the grocery sector and increase competition.

In its third quarter update, The Warehouse's group sales declined 2.5 per cent to $771.6m compared with the previous corresponding period. Online sales increased 7.4 per cent to $86.6m and now make up 11.2 per cent of the total revenue. Gross margin was steady at 35.6 per cent.

Shane Solly, portfolio manager with Harbour Asset Management, said the local market had a reflection day after all the macro-economic volatility.

"The US markets rallied into the close of trading and long-term bond yields stopped going up and this helped steady our market. What the markets are battling with is whether the central banks can control or get on top of inflation, or does it mean an economic recession."

The Australian S&P/ASX 200 Index made a strong rebound, rising 1.7 per cent to 7058.9 points at 5.45pm NZ time, and cloud accounting firm Xero was up 7.31 per cent to A$82.51 (NZ$90.82). Xero reported an annual loss of $9.11m the day before - a turnaround from a net profit of $19.77m.

Solly said the local market will be closely watching an action-packed week of company results, with Manawa Energy going first on Monday followed by Argosy Property (down 3c or 2.42 per cent to $1.21), Investore (down 6c or 3.85 per cent to $1.50) and Serko (up 6c to $4.80) on Wednesday.

PGG Wrightson was up 12c or 2.62 per cent to $4.70; and AFT Pharmaceuticals increased 11c or 3.49 per cent to $3.26. Retirement village operators Arvida and Oceania Healthcare got a break, gaining 3c or 2.04 per cent to $1.50, and 2c or 2;.06 per cent to 99c respectively

Vital Heathcare Property Trust increased 6c or 2.09 per cent to $2.93. Vital is making a third quarter distribution of 2.4375c a unit on June 23.

Transtasman chemicals business DGL Group fell a further 6c or 1.88 per cent to $3.14 after advising the market it is commencing an independent culture, diversity and inclusion review. This follows founder Simon Henry's attack on My Food Bag and Nadia Lim.

Mainfreight slid $1.36 or 1.85 per cent to $72.24; Contact Energy was down 12c to $7.40; Infratil declined 27c or 3.37 per cent to $7.875; Napier Port shed 5c to $2.85; Stride Property decreased 5c or 2.86 per cent to $1.70; Eroad fell 13c or 4.38 per cent to $2.84; and Vista Group was down 6c or 3.39 per cent to $1.71.

Retailers Briscoe Group was down 13c or 2.27 per cent to $5.59, and Hallenstein Glasson declined 10c to $5.55. Synlait Milk decreased 15c or 4.6 per cent to $3.11, and a2 Milk was down 9c or 1.98 per cent to $4.45. Rakon fell 8c or 4.94 per cent to $1.54.

Channel Infrastructure, down 1c to $1.07, has filled its $100m five-year bond at an interest rate of 5.8 per cent a year. James Miller is taking over as Channel board chairman, replacing Simon Allen.