Market commentary
WELLINGTON: The promise of improved earnings from leading stocks gave the New Zealand sharemarket a boost, and it closed the week more than 2% ahead.
The S&P/NZX 50 Index climbed a further 221.24 points, or 1.69%, to 13,333.43, after reaching an intraday high of 13,375.68. The index started the week at 13,024.69. There were 71 gainers and 75 decliners on volume of 49.75 million share transactions worth $213.18 million.
Market heavyweight Fisher and Paykel Healthcare, climbing more than 5%, and Mercury Energy both indicated they will report improved earnings for the present financial year, and along with Contact and Meridian they drove the market forward. Most of the listed companies will deliver their latest results next month.
Greg Smith, head of research for Fat Prophets, said the market had a good day and the message was all about optimism.
‘‘Under the Biden Administration, we are going back to some degree of normalcy and more moderate politicking — he’s coming out with an economic stimulus and a Covid plan, which was previously nonexistent.
‘‘Covid is still going to be an issue for much of this year and this was reflected in Fisher and Paykel’s strong update.’’
Fisher and Paykel Healthcare surged $1.84 to $35.10, on heavy trade worth $46.49 million, after reporting a 73% rise in operating revenue for the nine months ended December. Its share price reached a high of $36.21 during the day’s trading.
The company said revenue and net profit for the 2021 financial year would be higher than earlier forecast. For the ninemonth period, hospital respiratory products sales grew 113% compared with the previous corresponding period and Homecare sleep apnoea products were up 6%.
Mercury revised its fullyear operating earnings (ebitdaf) forecast to $535 million, from $505 million, and its share price rose 33c to $7.30. Mercury’s upgrade was based on an expected 200GWh increase in hydro generation to 3900GWh, matched with strong trading performance.
Contact Energy rose 36c to $9.19, Meridian gained 40c to $8.08, Trustpower climbed 19c to $8.70 and Genesis was up 5c to $3.85. Mr Smith said there was a strong investor appetite for the gentailers with their good dividend yields. —