Market close: Retirement village stocks fall as investors digest Government’s housing moves

The New Zealand sharemarket drifted for much of the day while investors digested the ramifications of the Government measures to cool the rampant housing market – with the retirement village stocks being immediately affected.

The S&P/NZX 50 Index was down 35.46 points or 0.29 per cent to 12,358.88 in a late fall, after reaching an intraday high of 12,432.01. There were 68 gainers and decliners over the whole market on heavy volume of 43.66 million share transactions worth $193.57 million.

Matt Goodson, managing director of Salt Funds Management, said the market was a little bit directionless following the tax changes in the housing sector.

“Retirement village stocks have shown moderate weakness. The changes aren’t helpful to the operators who will want to resell their units at higher prices when there is less house inflation and prospective occupants need to sell their own homes,” he said.

“Savers have been left in a difficult position. They get virtually nothing from term deposits and now owning a house rental becomes more difficult. Maybe the port of call is the equity market.”

Goodson said the housing measures have created a sharp decline in New Zealand interest rates and the currency, and this will be positive for the property companies and other dividend-yielding stocks.

The NZ dollar weakened to US69.77c against the American greenback, falling from US70.21c during the day. The NZ 10-year Government Bond yield fell from 1.697 per cent to 1.527 per cent.

Leading retirement village operators Ryman Healthcare fell 20c to $15.21, and Summerset Group Holdings was down 15c to $12.08. Arvida declined 4c or 2.35 per cent to $1.66, and Oceania Healthcare fell 6c or 4.32 per cent to $1.33.

Oceania successfully raised $80m from institutional investors at $1.30 a share, and is now making a retail offer for $20m. The total money raised will help fund new retirement village developments.

Medical devices supplier Fisher and Paykel Healthcare is benefiting from the weaker dollar and signs of a Covid third wave in Europe, with Germany going into a five-day lockdown over Easter. Fisher and Paykel rose 60c or 1.95 per cent to $31.40.

The re-opening stocks lost some confidence. Auckland International Airport fell 12c to $7.44; Air New Zealand lost 2c to $1.75; Vista Group was down 13c or 5.88 per cent to $2.8; Tourism Holdings declined 5c or 1.92 per cent to $2.55; and SkyCity Entertainment was down 2c to $3.42.

Port of Tauranga had a strong day, rising 12c to $7.62; Mercury Energy gained 29c or 4.6 per cent to $6.59; Freightways was up 8c to $11.01; Restaurant Brands climbed 10c to $12.81; Fletcher Building increased 8c to $6.70; and Briscoe Group collected 12c or 2.16 per cent to $5.67.

Transport software firm EROAD gained another 8c or 1.92 per cent to $4.25; and online travel provider Serko picked up a further 1c to $6.40 after telling the market it has started putting existing Booking.com business customers onto its new Zeno-powered online platform.

The property stocks had a mixed day. Goodman Property Trust fell 5c or 2.01 per cent to $2.195; Precinct Properties was down 1.5c to $1.655; Stride declined 2c to $2.16; while Property for Industry was up 2.5c to $2.805.

Amongst the decliners, Meridian lost 15c or 2.78 per cent to $5.25; Ebos Group fell 30c to $29.20; Infratil shed 13c or 1.86 per cent to $6.87; Skellerup Holdings declined 14c or 3.33 per cent to $4.06; and Synlait Milk was down 12c or 3.23 per cent to $3.60.

New listing My Food Bag continues to disappoint, falling 5c or 3.18 per cent to $1.52 – well below its initial public offer price of $1.85. The market will be looking for confirmation of its earnings as outlined in the prospectus and that its revenue is repeatable.

Sky Network Television is beginning the roll-out of broadband to Sky Box customers and its share price increased 0.002c to 17.6c. The high-quality broadband with fast fibre will cost $79 a month on a 12-month contract.

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