Shares edge lower on Oz virus nerves

Declines for F&P and a2 Milk weigh heavily on index

New Zealand shares edged lower as the two biggest companies — Fisher & Paykel Healthcare and a2 Milk — weighed on the broader index, following Australia lower amid concerns over the latest wave of new Covid-19 cases across the Tasman.

The S&P/NZX 50 Index declined 13.8 points, or 0.1 per cent, to 11,722.97. Within the index, 32 stocks rose, 16 fell, and two were unchanged. Turnover was $130.3 million. Australia’s S&P/ASX 200 Index was down 1.5 per cent in late trading as a record number of new cases in Victoria and growing numbers in New South Wales kept investors nervous across the Tasman.

A2 and F&P Healthcare — which both have secondary listings on the ASX — followed suit, which dragged down the NZX 50, given their importance to the index. The kiwi dollar at a six-month high added to the negative outlook for the two exporters. F&P Healthcare dropped 2 per cent to $35.99 and a2 Milk fell 1.3 per cent to $20.93.

“They are leading the index down,” said Peter McIntyre, an investment advisor at Craigs Investment Partners. The transtasman equity markets missed out on a rally across Asia as investors were cheered by a stimulus package agreed by the European Union to mitigate the economic impact of Covid-19.

Much of the NZX 50’s recovery in the June quarter was driven by just a handful of stocks, and only 12 out of the 50 have made year-to-date gains. It is a similar story in the US, where the S&P 500 Index turned positive for the year, yet most companies have missed out the rally.

Restaurant Brands New Zealand posted the day’s biggest decline, dropping 2.5 per cent to $11.73.

Meridian Energy fell 1.1 per cent to $4.72. It said yesterday national electricity demand in June was 1.1 per cent lower than in the same month a year earlier. Z Energy rose 5.1 per cent to $2.89, the day’s biggest gain, after it gave a first quarter update warning of low first-half operating earnings but in line with expectations. New Zealand Refining Company rose 1.5 per cent to 68 cents. It said it had “detailed planning” under way to simplify the refinery and to evaluate becoming an import terminal.

Z Energy, a key shareholder of the refinery operator, would benefit from the ability to import cheaply refined oil the way its competitors do. Fonterra Shareholders’ Fund units fell 0.8 per cent to $3.85 and Synlait Milk rose 1 per cent to $7.12. Goodman Property Trust told unitholders it would probably offer a new retail bond to replace a $100m bond maturity in December to keep its bank funding available for other uses. The units rose 0.9 per cent to $2.19 yesterday.

Tech stocks were stronger. Vista Group International rose 2.4 per cent to $1.30, and Pushpay Holdings lifted 1.8 per cent to $7.95. Broadband network operator Chorus advanced 1.8 per cent to $7.44 and Spark New

Zealand was up 1.5 per cent at $4.91. Outside the benchmark, Briscoe Group shares bounced 7 cents, or 2.1 per cent, to $3.37 on advice that the retailer’s half year results to end July “may be closer to last year” than expected on the back of unexpected strength in sales, combined with cost saving measures.