Sharemarket declines as Fisher & Paykel Healthcare hits 2-year low

Monday, 28 March 2022

The sharemarket fell, as declines in Fisher & Paykel Healthcare and other heavyweight stocks weighed on the index.

The benchmark S&P/NZX 50 Index dropped 1.2 per cent, or 145.279 points, to 11,909.72 on Monday.

“We are the worst performing index in Asia,” said Craigs Investment Partners investment adviser Peter McIntyre. “We have got too many heavyweights in the index trading weaker today.”

Fisher & Paykel Healthcare, which is the biggest stock on the market, fell 3.8 per cent to a two-year low of $23.48.

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Big heavyweight stocks declined, pulling the benchmark index down.

The maker of ventilation equipment and other medical devices warned on Wednesday last week that it expected annual revenue of between $1.675 billion and $1.7b.

That was below market expectations, and well below the $1.97b revenue in the previous year.

Sales of the company’s respiratory devices surged through the pandemic and investors were now trying to gauge how the slower pace of sales would flow through to earnings in 2023, McIntyre said.

Contact Energy slid 0.6 per cent to $7.90, Meridian Energy dropped 1 per cent to $4.99, Ryman Healthcare fell 2.9 per cent to $9.29, and Infratil shed 3 per cent to $7.99.

McIntyre said the 5-year swap rate, used as an indicator of future interest rates, had risen over the past month to 3.43 per cent from below 3 per cent, which was weighing on equity markets.

“We are an interest rate sensitive market, and we have seen some of those stocks which are yield sensitive trade lower today,” he said.

Air New Zealand slipped 0.4 per cent to $1.385 as investors await details of a capital raising where the airline is expected to sell new shares at a discount to raise funds.

The national carrier announced on Monday that it has been awarded a further 12 months of support for cargo flights after the Government extended the scheme that helps maintain air freight capacity for trade through the Covid-19 pandemic.

The extension will help support about 60 flights a week to destinations including Los Angeles, Vancouver, Hong Kong, Shanghai and key Pacific Islands and Australian ports, and is worth about $180 million, the airline said.

ERoad gained 2.9 per cent to $3.91. The transportation technology services company said it had refinanced and increased its debt facilities to fund future organic growth. Its total facility lifted to $90m from $59.9m.

“ERoad is entering into a period of significant growth,” said chief executive Steven Newman. “This refinancing and the amortisation profile gives us extra flexibility to support organic growth over the coming years.”

Asian shares were mixed on Monday as worries about the pandemic, inflation and the war in Ukraine weighed on market sentiment.

Benchmarks in Hong Kong and Sydney gained while Tokyo, Seoul and Shanghai declined.

The Shanghai Composite index edged 0.1 per cent lower, Japan's benchmark Nikkei 225 slipped nearly 0.6 per cent, and Australia's S&P/ASX 200 gained 0.4 per cent.

South Korea's Kospi inched down less than 0.1 per cent, while Hong Kong's Hang Seng surged 1.4 per cent.

Wall Street ended last week with a moderate rally. The S&P 500 rose 1.8 per cent to 4543.06 for a 0.5 per cent gain for the week.

- With AP