Market commentary

WELLINGTON: Many of the stocks enjoyed handy price gains as investors look for ‘‘new’’ value, but the New Zealand sharemarket was bogged down by the two heavyweights, Fisher and Paykel Healthcare and a2 Milk yesterday.

The S&P/NZX 50 Index gained 76.75 points or 0.65% to 11,975.02 after a late surge in prices. More than half of the 181 stocks on the whole market had rises, while 41 declined, and trading increased in the final hour to 52.08 million shares worth $159.17 million.

Fisher and Paykel Healthcare was down 13c to $33.77 on trade worth $18.3 million after falling as much as 63c during the day, and a2 Milk was up 4c to $15.48 in the late moves on trade worth $12.9 million.

Rickey Ward, head of investment strategy group at JBWere, said people forgot that Fisher and Paykel and a2 Milk made up 25% of the market’s capitalisation and they drove the direction.

‘‘If they are down or flat, then they drag the market down. But take them away and you find the market has had a pretty good day. The majority of the market is in pretty good shape,’’ he said.

The talk on the market — outside of President Donald Trump’s return to the White House and the Dow Jones index’s 456 points rise overnight — was Fletcher Building and Air New Zealand, which rose on contrasting news.

Fletcher Building gained 12c or 2.89% to $4.27, having climbed more than a third since midAugust when it sat at $3.30. Mr Ward said Fletcher continued to get support on strong housing data.

‘‘Fletcher’s initial forecast of a contraction in the residential market may be conservative or cynical, and there is ongoing rotation back into value stocks. Fletcher is one of them,’’ he said.

Air New Zealand, halfowned by the Government, announced its chief financial officer Jeff McDowall was leaving the company in the middle of next year after more than 20 years. The airline’s share price climbed 5.5c or 3.65% to $1.56.

Mr Ward said it looked like Mr McDowall had resigned out of frustration.

‘‘Air New Zealand needs to resolve its capital situation and they’ve said they’ll do a capital raising in the first part of next year.

‘‘Instead of raising money, they’ve gained access to a government loan with punitive interest at 7%8%. Other companies have gone out and raised money without having clear visibility on the outlook.

‘‘It suggests that Air New Zealand is driven by political decisions rather than what is prudent for all shareholders. Why the share price went up, I really don’t understand,’’ Mr Ward said.

Amongst the gainers were Ebos, up 33c to $24.33; Freightways, gaining 13c to $8.17; Pushpay Holdings, increasing 15c to $8.72; Synlait Milk up 10c to $5.62 and Chorus, up 23c or 2.71% to $8.72.

The energy stocks enjoyed another good day, Contact climbing 13c to $7.20, Meridian gaining 13.5c or 2.75% to $5.04, and Mercury increasing 9c to $5.25.

NZME continued its rerating, climbing 5c or 8.62% to 63c and gaining more than 16% in two days. Sky Network Television was up 5c or 3.45% to 15c following news it is looking at providing subscribers with more flexible viewing packages.

Among those falling, wine company Delegat Group was down 19c to $14.65; and Marsden Maritime Holdings, owner of Northport near Whangarei, lost 9c to $5.80. —