Fisher & Paykel leads the fall on NZ market

New Zealand shares fell, taking a negative lead from Wall Street, as Fletcher Building’s share offer weighed on demand. Fisher & Paykel Healthcare, which gets almost half its revenue in North America, led the decline, paced by Meridian Energy, Ryman Healthcare and Arvida Group, while Synlait Milk rose to a record.

The S&P/NZX 50 index fell 49.81 points, or 0.6 per cent, to 8323.22. Within the index, 36 stocks fell, 12 rose and two were unchanged. Turnover was $148 million. Fletcher said it had completed the institutional entitlement offer and shortfall bookbuild component of its capital raising plan, reaping $515m of its $750m target. The retail entitlement offer opens on Monday. Institutions paid $6.15 in the bookbuild — above the deeply discounted offer itself at $4.80. Fletcher stock rose 2.5 per cent to $6.15 when it resumed trading yesterday. “I would’ve thought it provides a signal that investors are feeling a bit more comfortable about what Fletcher has done,” said Rickey Ward, NZ equity manager at JBWere. The sale had a dampening effect on the market, as had school holidays, he said.

F&P Healthcare, which gets almost 50 per cent of its sales in North America, dropped 2.8 per cent to $12.04, following Wall Street’s lead. Meridian fell 1.9 per cent to $2.815, Ryman fell 1.7 per cent to $10.45 and Arvida declined 1.7 per cent to $1.16. Summerset Group fell 1.6 per cent to $6.88 and Metlifecare fell 1.2 per cent to $5.63, adding to the list of stocks often held for their income that have weakened in recent days as US Treasury yields have risen.

Comvita gained 2.4 per cent to $6.91, Synlait Milk gained 1.5 per cent to a record close of $10.03 and a2 Milk rose 0.5 per cent to $12.76. The stocks had been the top performers in the market in 2017 but had pared their gains more recently.

Ward said MSCI tried to capture 85 per cent of the New Zealand market by value in the index and that had driven speculation about companies that could be shed. “For Fletcher, the capital raise helped,” he said. “Unfortunately index weightings are becoming more important and changes get magnified in a small market like New Zealand.”

AMP fell 0.9 per cent to $4.60 on the NZX while Westpac Banking Corp fell 0.4 per cent to $30.38 and Australia & New Zealand Banking Group gained declined 0.6 per cent to $28.38.

The Financial Markets Authority said it was keeping close tabs on Australia’s Royal Commission into misconduct in the banking, superannuation and financial services industry, with hearings this week uncovering misdeeds at AMP, prompting chief executive Craig Meller to fall on his sword.