MARKET CLOSE: Shares rise; F&P Healthcare at record

New Zealand shares rose as a decline in the currency and the promise of lower interest rates boosted sentiment for equities. Meridian Energy led the market higher, as Fisher & Paykel Healthcare rose to a record.

The S&P/NZX 50 Index advanced 22.37 points, or 0.4%, to 5870.76. Within the index, 28 stocks rose, 15 fell and seven were unchanged. Turnover was $111 million.

Reserve Bank governor Graeme Wheeler repeated that further depreciation in the New Zealand dollar is necessary and reiterated the central bank was firmly in an easing cycle to maintain growth in a speech this morning.

Stocks held for their reliable dividend supported the market's gains. Meridian Energy, the government-controlled utility, climbed 3.3% to $2.19. SkyCity Entertainment Group, the casino operator, advanced 2.6% to $4.30. Goodman Property Trust, the property investor and developer, climbed 1.6% to $1.27. Spark NZ, formerly known as Telecom, increased 1.2% to $2.90.

"The yield play has always been there. I don't think that's gone away. I think people question the multiples you pay to get access to income," Ricky Ward, New Zealand equity manager at JB Were New Zealand equities said. The market gained on "confirmation that you're being forced to take a bit of equity risk for fixed interest returns still."

The local currency has retreated to six-year lows on the back of weak dairy prices and fuelled by the Reserve Bank's move to lower interest rates.

Stocks with currency exposure, like exporters, gained. F&P Healthcare, the breathing apparatus manufacturer and exporter, gained 0.3% to match Monday's record $7.60. Ebos Group, the health and animal care with assets in Australia, rose 1.4% to $11.10.

"Currency-related investments tend to be getting a lot more focus in recent days and recent weeks than they have for quite a while," Ward said. "The weaker New Zealand dollar against the US in particular is helping export orientated companies. The weak New Zealand dollar has helped people refocus back on export-oriented companies and particularly those that are growing profit anyway."

Ryman Healthcare, New Zealand's largest retirement village operator, fell 0.4% to $8.41. It told shareholders at its annual meeting it plans to increase resident numbers by 70% in the next five years in New Zealand and Australia as it also mulls an ASX listing.

Of the day's decliners, Kathmandu Holdings was the worst performer, declining 1.8% to $1.67. The outdoor goods retailer is in the middle of a takeover offer from Briscoe Group, the homewares and sporting goods chain. On Friday Briscoe said it was waiting on a trading update before forecasting future earnings growth. Briscoe fell 0.7% to $2.82.

Outside the benchmark index, Coats Group, the company that grew out of diversified investor Guinness Peat Group, was unchanged at 60.5c after it said the sale of its EMEA Crafts business to Aurelius Group will be completed on Friday although the loss on sale won't be announced until its first-half results, due on August 3.

Abano Healthcare shares were unchanged at $7.50 after the specialist medical investor lifted underlying earnings 46%, and paid a fatter dividend, underpinned by its dental and audiology businesses.

(BusinessDesk)