Market close: NZX rebounds strong on wage subsidy news

Finance Minister Grant Robertson. Photo / Mark Mitchell

The New Zealand sharemarket had a strong rebound on the back of further Government support for workers and renewed life in the retirement village sector.

The S&P/NZX 50 Index pushed ahead 220.8 points or 1.93 per cent to 11,672.95. A burst of late trading brought the volume to 57.43 million shares worth $149.18 million, and there were 93 gainers and 45 decliners over the whole NZX market.

Finance Minister Grant Robertson announced mid-afternoon the Government is extending the wage subsidy scheme to September 14 at a cost of $510m and covering 470,000 jobs. The Government is also simplifying the leave scheme for workers told to self-isolate at home and still receive the wage subsidy.

In a further move, the Government has agreed in-principle to extend the mortgage deferral scheme to March 31 next year. The scheme to support households was due to expire on September 27.

Mark Lister, head of private wealth research with Craigs Investment Partners, said the wage subsidy has been an important shock absorber for the economy.

"The extension is only for another two weeks but it's an important period for the confidence of businesses and workers against the backdrop of the resurgence in Covid cases.

"It was always going to be a positive day. I'd call it a relief rally. The market had just had a cautious and nervous week compared with those offshore, and confirmation on Friday that our alert levels would not change provided relief," said Lister.

Summerset Group Holdings reported a plunge in its net profit because of write-downs in the value of its retirement villages but its share price soared 40c or 5.43 per cent to $7.77.

Summerset, which has 31 villages housing 5700 residents and $3.4 billion of assets, announced a net profit of $988,000 for the six months ending June 30 compared with $92.6m for the same period last year. Its revenue was $82.4m, up 10.8 per cent and the underlying profit was at the top end of guidance at $45.07m, a fall of 5.7 per cent.

Lister said the Summerset numbers were no surprise and the market latched on to signs of the rebound (in business performance) continuing through July and the first half of this month.

Ryman Healthcare rose 66c or 5.33 per cent to $13.05 on trade worth $4.3m; Oceania Healthcare was up 3c or 3.13 per cent to 99c, Arvida edged ahead 1c to $1.50 and Metlifecare was down 1c at $5.91.

Market heavyweights had strong days, Fisher and Paykel Healthcare was up 70c to $35 on trade worth $18.3m and a2 Milk, which announces it latest result on Wednesday, increased 45c to $21.40 on trade of $19.48m.

Freightways, whose contract to provide transtasman airfreight has been extended through August, rose 21c or 3.1 per cent to $6.96.

Genesis Energy and New Zealand Oil and Gas both benefited from a 23 per cent estimated increase in the Kupe gas and oil field's reserves. Kupe off the coast of Taranaki provides 15 per cent of New Zealand's annual gas demand, and 50 per cent of the LPG demand until 2025.

Genesis, which has a 46 per cent share of the Kupe field, was up 4c to $2.795 and NZ Oil and Gas, with a 4 per cent stake, rose 5.5c or 9.91 per cent to 61c.

Augusta Capital, which has been taken over by Centuria New Zealand Holdings, is delisting from the NZX Main Board on Friday. Augusta's trading will be suspended on Wednesday.