Fisher & Paykel Healthcare, Meridian Energy propel sharemarket higher

Friday, 22 January 2021

Fisher & Paykel Healthcare has experienced worldwide demand for its breathing devices due to Covid-19.

Strong demand for Fisher & Paykel Healthcare’s breathing devices during the Covid-19 pandemic and an insatiable desire for clean energy stocks like Meridian Energy pushed up the two biggest stocks on the sharemarket and propelled the benchmark index higher.

The S&P/NZX 50 Index jumped 221.243 points, or 1.7 per cent, to 13,333.43 on Friday.

Fisher & Paykel Healthcare closed up 5.5 per cent at $35.10, taking its gain over the past year to 57 per cent, and increasing its market capitalisation to $20.2 billion.

Managing director Lewis Gradon said revenue jumped 73 per cent in the nine months to December 31, as sales of its breathing devices for hospitals continued to be strong amid an influx of Covid-19 patients requiring hospitalisation for respiratory treatment. Annual revenues and profits would be higher than the company had previously expected, he said.

Electricity stocks are in demand as a result of the popularity of clean energy exchange traded funds.

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“They are going extremely well, very, very strongly,” said David Price, director of institutional equities at Forsyth Barr.

Meanwhile, demand for clean energy stocks from overseas exchange-traded funds has continued unabated, pushing up Meridian and Contact Energy.

Meridian rose 5.2 per cent to $8.08, taking its market capitalisation to $20.7b and making it the most valuable stock on the market. Contact lifted 4.1 per cent to $9.19.

“It was really a game of the gentailers and healthcare,” said Price. “They were nearly half of the index move today. They did most of the heavy lifting.”

Electricity generator Mercury rose 4.7 per cent to $7.30 after it raised its forecast for full-year pre-tax profit by $30 million to $535m due to increased hydro generation and a strong trading performance.

Price said it was a “decent uplift”.

Bucking the upward trend, retirement village and aged care operator Oceania Healthcare fell 1.3 per cent to $1.48 after reporting first-half net profit increased by $9.9m to $24.8m. It will pay a dividend of 1.3 cents per share.

Hamilton Hindin Greene investment adviser Grant Davies said investors may have been disappointed to see the dividend remain at lower levels, but otherwise it was “a pretty solid result”.

In the United States on Thursday, stock indexes capped a day of choppy trading with a mixed finish, though solid gains by technology companies helped lift the S&P 500 and Nasdaq composite to more record highs.

The S&P 500 edged up less than 0.1 per cent. Traders bid up shares in Big Tech stocks, including Apple, Amazon and Facebook. Those gains helped outweigh losses in energy stocks, banks and elsewhere. Stocks in smaller companies, which have led the way higher this year, gave up some of their recent gains.

– With AP