Sectors to watch
Airports/airlines: Airnew Zealand narrowly avoided disaster thanks to a Government loan, and
Auckland Airport’s revenue has dried up severely. But both stand to benefit when travel resumes, especially with a trans-tasman bubble on the horizon.
Tourism: As above, although recovery could be slow. There will be winners and losers, as some companies emergewith less competition.
Retirement stocks: Retirement villages got beaten up this year because of whatwas expected to be a soft property market. Elderly occupants rely on a strongmarket to get a good price for their houses before they move. However, given that house prices have flipped that prediction and could be going strong for another five years, retirement villages could do very well next year.
Agricultural/rural sector: New Zealand’s agricultural sector ‘‘saved us inmany ways’’, Lister says. ‘‘And I think thatwill probably continue.’’ But in terms of the stocks on our market, it could be amixed bag.
While Fonterra’s forecasts are looking solid, exporters face shipment problems and, most likely, a higher New Zealand dollar.
Shares in dairy company A2 – one of this year’s best performers – have slipped from above $21 to around $14, in part because of the disappearance of Chinese ‘‘daigou’’ middlemen who used to promote the brand.
Tech stocks: Fisher & Paykel Healthcare had a great year after being flooded with orders for respiratory equipment (it was quick to point out it did not make ventilators). Now vaccines are on the way, the share price has come back a little, although its sensitivity to the kiwi dollar may be a bigger influence.
Covid also did church donations software firm Pushpay a favour, prompting churchgoers in its main market, the US, to shift into digital giving. That trendmay well continue.
Value stocks: Boring but steady companies that have fallen out of fashion due to management problems or other issues, but are often good dividend payers. A good example is Fletcher Building, says Richard Stubbs, co-founder of funds manager Castle Point.
‘‘Investors seem to be really focused on quality yielding businesses that are growing, and totally disregarding companies that are not very interesting and might have had a few problems but are here to stay. Some of those companies are as cheap as they would be at any part of the market cycle.’’
Listings and sharemarket floats: A number of smaller firms, particularly tech stocks, skipped across the ditch this year for primary or secondary listings. They cited access to deeper capital and more adventurous investors. But given the amount of money currently looking for a home, Stubbs says there’s no reason they can’t find that capital here. Lister also hopesmore companies will join the NZX this year to broaden investor choice.