NZ shares gain as weaker kiwi buoys A2, F&P Healthcare

A2 led the market higher, up 2.3 per cent at $16.28. Photo / Supplied

New Zealand shares rose, led by A2 Milk and Fisher & Paykel Healthcare as a weaker kiwi dollar helped boost the value of their overseas earnings.

The S&P/NZX 50 Index rose 39.16 points, or 0.3 per cent, to 11,873.98. Within the index, 17 stocks gained, 24 fell, and nine were unchanged. Turnover was $87.6 million, with just four stocks trading on volumes of more than a million shares.

Equity markets across Asia were mixed, with investors sitting on the sidelines as they continue to digest the impact of the coronavirus outbreak, especially with Wall Street closed for the President's Day holiday.

Prime Minister Jacinda Ardern today said Treasury downgraded its economic growth outlook, and the kiwi dollar has remained under pressure as a result, dropping below 65 US cents at the end of January.

Peter McIntyre, an investment adviser at Craigs Investment Partners, said a number of trade and travel focused companies had been affected by the outbreak of the covid-19 virus, but that the weaker currency acted as a shock absorber for them.

"There will be a degree of nervousness in the markets and I think they'd prefer the US markets open and giving the lead to the rest of Asia," he said.

A2 led the market higher, up 2.3 per cent at $16.28 on a volume of 1.1 million shares, and F&P Healthcare rose 2.2 per cent to $24.82. Restaurant Brands New Zealand increased 1.6 per cent to $13.10, and Air New Zealand advanced 1.1 per cent to $2.78. Mainfreight increased 0.8 per cent to $40.82.

Property For Industry rose 1.2 per cent to $2.49 after reporting a 60 per cent increase in annual profit. The real estate investor is shifting its portfolio to become a pure industrial play, and McIntyre said it had performed well, increasing its adjusted funds from operations which dictate its dividend payments.

Fonterra Shareholders' Fund units increased 0.8 per cent to $3.89 ahead of this week's Global Dairy Trade auction. Synlait Milk, which slashed its earnings guidance last week, decreased 0.5 per cent to $6.39.

Trustpower fell 3.4 per cent to $7.10, posting the biggest decline on the day. The power company downgraded its earnings guidance, blaming lower generation and wholesale prices.

Heartland Group Holdings increased 0.5 per cent to $1.85 ahead of its earnings result tomorrow, while Fletcher Building was unchanged at $5.23 and Spark New Zealand was unchanged at $4.765 before they report on Wednesday.

McIntyre said earnings season had been mediocre so far, while noting that the majority of announcements would come over the next fortnight.

He pointed to today's downgraded forecasts from Trustpower and retailer Hallenstein Glasson Holdings – which fell 1 per cent to $5.80 – as highlighting some of the risks facing the economy.

Among other stocks trading on volumes of more than a million shares, Vital Healthcare Property Trust increased 0.7 per cent to $2.88, Metlifecare was unchanged at $6.93, and Vector decreased 0.9 per cent to $3.45.