MARKET CLOSE: NZ shares extend gain as A2 hits new record; Ryman, Metlifecare, Summerset drop
By Sophie Boot
Oct. 24 (BusinessDesk) - New Zealand shares eked out another gain as the market digested the details of the governing
deals made by the incoming Labour government, with A2 Milk hitting a fresh record while retirement village stocks fell.
The S/NZX50 Index edged up 0.55 points, or 0.007 percent, to 8,130.10. Within the index, 21 stocks rose, 21 fell and eight
were unchanged. Turnover was $205 million.
Matt Goodson, MD at Salt Funds Management, said the market was focused on the new government and figuring out the
relative winners and losers from the policies announced as part of the deals Labour has made with New Zealand First and
the Green Party.
Retirement stocks are set to be one of the biggest losers and starting to decline before the September election as
Labour's polling improved. Goodson said the stocks have been huge beneficiaries of rising house prices, and moves to
lessen immigration and increase house building will change the backdrop for those companies.
Ryman Healthcare was the worst performer, down 3.7 percent to $8.85. Metlifecare dropped 2.6 percent to $5.73, and
Summerset Group Holdings fell 2.2 percent to $4.85. Arvida Group slipped 0.9 percent to $1.17, while outside the
benchmark index Oceania Healthcare dropped 3 percent to 98 cents.
A2 Milk, which has booked strong gains this year as its sales in China continue to improve, was the best performer, up
3.6 percent to $8.28.
"Particularly in the Australian market, there is a small number of stocks that attract momentum-type money," Goodson
said, adding that the stock has benefited from the weaker kiwi dollar against the Australian dollar, along with other
exporters. A study from the University of Auckland's Liggens Institute, released over the weekend, showed A2 Milk can
help with symptoms of lactose intolerance, although Goodson said the research was "more of a marketing angle until more
information is available."
Freightways rose 2.6 percent to $7.62, Z Energy gained 2 percent to $7.14 and Property for Industry advanced 1.9 percent
to $1.63.
The Labour/NZ First coalition deal included plans for a full review of retail power pricing has been promised, although
no further details have yet emerged. Goodson said the market is still trying to figure out what form the review will
take.
"It's hard to say at this point exactly what this means, the impacts on the listed gentailers remains to be seen and it
hasn't had a noticeable impact today," he said. Genesis Energy, the biggest energy retailer in New Zealand, rose 0.8
percent to $2.43, while Mercury New Zealand gained 0.4 percent to $3.445. Meridian Energy dropped 2.4 percent to $2.82
and Contact Energy fell 1.8 percent to $5.55.
Fletcher Building shares are in a trading halt and were last at $7.96, having dropped 25 percent this year, ahead of
tomorrow's annual meeting as a review of its Building + Interiors (B+I) business unit hangs over the company's 2018
earnings outlook.
"The company is taking the necessary time to carefully consider this matter. We expect the trading halt to cease on
Wednesday 25 October 2017, with the announcement of earnings guidance for the 2018 financial year," it said in a release
to the stock exchange. Fletcher also said it expects to announce a new CEO prior to market opening tomorrow.
(BusinessDesk)