Sharemarket gains, led by Fisher & Paykel Healthcare as Covid cases rise

Tuesday, 13 April 2021

Fisher & Paykel Healthcare’s respiratory devices have been in demand during the Covid-19 pandemic.

The New Zealand sharemarket rose, following the fortunes of its largest stock Fisher & Paykel Healthcare.

The benchmark S&P/NZX 50 gained 1.1 per cent, or 137.706 points, to 12,656.42 on Tuesday.

Fisher & Paykel Healthcare jumped 3.8 per cent to $33.39 as investors bet sales of its respiratory devices would rise following a surge in Covid-19 cases in the United States.

The seven-day rolling average for daily cases in the US increased over the past two weeks to 70,040 from 63,236, according to John Hopkins University.

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Comvita raised its forecast for full-year profit.

Brad Gordon, an investment adviser at Hobson Wealth Partners, noted Fisher & Paykel Healthcare had been volatile recently, having fallen 3.7 per cent on Monday.

“I suspect it’s up on the back of rising cases again, particularly in the US,” he said.

The a2 Milk Company also had a strong bounce on Tuesday as investors bet the stock was good value following its decline, he said.

A2 Milk jumped 3.7 per cent to $8.89. The stock has lost 52 per cent of its value over the past year as sales of its specialist milk products were crimped by the pandemic.

Australian broker Bell Potter upgraded its recommendation on the stock to ‘buy’ from ‘hold’ on the expectation its fortunes are picking up after selling down its inventory and as demand improves in China, according to a report by The Motley Fool.

Comvita rose 4.4 per cent to $3.33 after the honey company raised its full-year profit forecast.

The company expects pre-tax earnings of between $22.5 million and $25.5m in the year to the end of June, up from its previous expectation of $20m-to-$23m.

“The increase in range is caused by ongoing strong growth in its focus growth markets of China and North America (offsetting ANZ and Hong Kong challenges), strong performance in the digital channel now accounting for over 30 per cent of group sales, continued efficiencies in production and good cost control,” Comvita said.

Despite this year’s honey harvest being below average, the quality of the harvest and good control of costs means it will deliver a small contribution to profits in this year, Comvita said.

SkyCity Entertainment Group fell 1.2 per cent to $3.43 after the casino operator said it would no longer work with junket operators to bring high-roller gamblers to its casinos. Regulators in Australia have raised concerns about links between junket operators and organised crime at Crown casinos.

Pushpay Holdings fell 2 per cent to $1.93, taking its decline this month to 7.2 per cent. Forsyth Barr downgraded the stock to ‘underperform’ from ‘neutral’ in an April 9 report, saying the digital donation firm had lost significant ground to its rivals over the past 12 months as it increased prices compared with its low-cost competitors.

Gordon said investor focus would soon turn to reporting season in the US.

Corporate results may indicate the direction of future growth as nations gradually emerge from the damage set off by the pandemic.

In New Zealand, companies with a March 31 balance date would report earnings in May.

– With AP