NZ shares edge higher as Chinese virus fears weigh

Vista Group International led the market higher, up 2 per cent at $3.65. Photo / 123RF

New Zealand shares edged higher as investors continue to assess the impact of the coronavirus outbreak in China.

The S&P/NZX 50 Index increased 11.43 points, or 0.1 per cent, to 11,901.11. Within the index, 24 stocks rose, 16 fell, and 10 held steady. Turnover was $139 million.

Equity markets across Asia were mixed as investors await a decision from the World Health Organisation on whether the outbreak will be deemed an emergency. Australia's S&P/ASX 200 Index was down 0.7 per cent in afternoon trading.

Grant Williamson, director of Hamilton Hindin Greene, said the weak Australian market was likely an factor in New Zealand's lacklustre performance today.

"Obviously the market is very flat. Wall Street did very little overnight as well, although Australia is under a little bit of pressure, so we are certainly doing a little bit better than them today," he said.

Vista Group International led the market higher, up 2 per cent at $3.65. Tech stocks got a strong lead from Wall Street after IBM reported an unexpected increase in fourth-quarter revenue. Pushpay Holdings was unchanged at $4.48.

Retirement village operator Summerset Group rose 1.5 per cent to $9.25, an all-time high. Metlifecare increase 0.2 per cent to $6.87, below its $7 takeover offer.

Williamson said this was likely due to institutional investors selling Metlifecare shares ahead of the impending takeover and reinvesting in other retirement stocks to maintain their exposure to sector.

"Obviously, some institutions are thinking sell out now, give up a few cents, but reinvest the money straight away," he said.

Oceania Healthcare was unchanged at $1.31. It reports its first half earnings tomorrow.

Genesis Energy rose 0.2 per cent to $3.24 on a volume of 140,000 shares after it said first-half earnings would fall due to low hydro storage and high fuel costs. Mercury NZ fell 2.3 per cent to $5.22 on a volume of 1.2 million shares after it noted lower December-quarter generation from its dams on the Waikato River. Vector fell 1 per cent to $3.66.

Tourism Holdings posted the day's biggest decline, falling 4.7 per cent to $3.05 on a volume of 168,000 shares. Statistics NZ data today showed international visitor numbers continued to fall in November as declining numbers of Australians and Americans joined the slowdown in Chinese arrivals - a trend that could be amplified by the spread of coronavirus.

"Investors will have that in the back of their minds when they look at these tourism stocks. If that does get worse that will have a pretty negative effect on tourism," Williamson said.

The weaker Australian market put pressure on A2 Milk, which fell 0.1 per cent to $16.02 on a volume of 495,000, giving up some of the strong gains it made yesterday.

"A2 is very much led from Australia, that's where most of the volume goes through the market, so that has probably just put a little bit of selling into that A2 market," Williamson said.

Spark New Zealand was the most traded stock on a volume of 4.3 million shares. The stock price remained unchanged at $4.6. Williamson said Spark had been performing well in recent months, getting close to its price in September last year.

Fletcher Building rose 0.5 per cent to $5.61.

"This is the highest level we have seen since November 2018. So, it has broken out of a trading range and is looking not too bad," Williamson said.

Among other stocks that moved more than a million shares, Arvida Group fell 0.5 per cent to $1.85 and SkyCity Entertainment Group rose 0.3 per cent to $4.08.

Fonterra Shareholders' Fund units were unchanged at $4.03. Fonterra completed the sale of its 50 per cent stake in DFE Pharma for $554m, including a $17m settlement adjustment.

Outside the benchmark index, Eroad shares slipped percent to $3.20 after the company reported annual double-digit unit growth in the December quarter, but said it wasn't satisfied with the performance of its Australian and American units.