Market close: Retirement village stocks come under pressure

Retirement village stocks came under pressure as the New Zealand sharemarket had another lifeless day, posting its fourth successive loss.

The S&P/NZX 50 Index was down 49.26 points or 0.38 per cent to 12,970.99 on low volume of 39.97 million share transactions worth $134.56 million.

There were 100 decliners and just 35 gainers across the market. The index, struggling with rising interest rates, has now fallen nearly 1.2 per cent over the last four trading days.

Dan Sratful, investment adviser with Forsyth Barr, said the market was soggy, just like the weather.

“It has good days and then bad days and ends up tracking sideways. The market was buoyed by the New Zealand corporate earnings season in late August /early September but it has been unable to hold onto those gains,” he said.

“With rising interest rates, the market will continue to struggle. Some individual stocks will keep performing and others won’t, and it will become a stockpicker’s market.

“The continuing Covid lockdown also provides uncertainty and is hurting stocks like Air New Zealand, Auckland Airport, SkyCity and Tourism Holdings – and maybe even the retirement village companies,” said Stratful.

Ryman Healthcare fell 42c or 2.82 per cent to $14.48; Oceania Healthcare was down 3c or 2.11 per cent to $1.39; Arvida, buying six Arena Living retirement villages for $345m, was down 2c to $2; and Summerset Group Holdings shed 12c to $14.38.

Air New Zealand told shareholders at the annual meeting that it has suspended its 2022 earnings guidance because of the uncertainty, and it would be making further drawdowns on the Crown standby facility, now sitting at $1.045 billion, after using $455m.

The drawdown would increase to $600m-$650m by the end of December and about $900m by the end of February. The airline is still planning a capital raise in the first quarter of next year, and its share price was down 4c or 2.41 per cent to $1.62.

Auckland International Airport fell 17c or 2.13 per cent to $7.83; and Tourism Holdings was down 8c or 2.89 per cent to $2.69.

Among the interest rate-sensitive energy stocks, Contact was up 9c to $8.20; Mercury fell 12c or 1.94 per cent to $6.05; Meridian declined 5c to $4.98; and Genesis decreased 7.5c or 2.29 per cent to $3.20.

Freightways declined 11c to $12.71 after telling shareholders at its annual meeting that the company will achieve earnings growth in the 2022 financial year but it didn’t say by how much. Freightways has been encouraged by the increase in eCommerce volumes and market share gains in express packages.

ANZ New Zealand had a 44 per cent increase in profit to $1.92b for the year ending September, while its parent ANZ Banking Group raced to a $6.162b profit, up 72 per cent, and paying a dividend of 72c a share on December 16. Its share price, however, fell 27c to $29.72, while Westpac Banking Corporation was up 35c to $27.50.

Heartland Group Holdings, unchanged at $2.35, said at its annual meeting that net profit for the 2022 financial year is expected to be $93m-$96m, up from $87m in the previous year.

Following its deep dive the day before, a2 Milk steadied and gained 2c to $6.35, after presenting at the Select Equities – 5th Annual China Conference. Synlait Milk fell 9c or 2.51 per cent to $3.50.

DGL Group declined 11c or 3.38 per cent to $3.14; South Port New Zealand decreased 17c or 1.83 per cent to $9.10; Foley Wines shed 5c or 2.99 per cent to $1.62; Rakon was down 4c or 2.55 per cent to $1.53; and Allied Farmers fell 4c or 5.33 per cent to 71c.

Mainfreight rebounded $1.10 to $88.60; Port of Tauranga recovered 11c to $6.70; Skellerup Holdings was also up 11c or 1.83 per cent to $6.11; EROAD gained 16c or 3.02 per cent to $5.46; Scott Technology collected 13c or 4.05 per cent to $3.34; and My Food Bag picked up 7c or 5.93 per cent to $1.25.

Sky Network Television told shareholders at its annual meeting that the target for the coming year is revenue growth of up to $35m, a strong step towards the three-year goal of $75m-$100m annually. The new Sky Box will be in homes by the middle of next year, and its share price was unchanged at $1.88.

Wellington Drive Technologies rose 0.007c or 3.93 per cent to 18.5c after increasing revenue to $15.3m for the September quarter, compared with $6 for the same period last year.

Established distributor Vulcan Steel is planning to list on both the ASX and NZX on November 10 and before that is making an initial public offer of 52.3m shares at A$7.10 ($7.43) a share. Tauranga-based Vulcan expects to raise A$371.6m.

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