New Zealand shares rose to a record on the last day of the year, with Summerset Group Holdings, Orion Health Group and NZX gaining while A2 Milk Co gave up more of its gains.
The S&P/NZX 50 Index rose 4.87 points, or 0.08 per cent, to 6324.26. Within the index, 29 stocks rose, 15 fell and six were unchanged. Turnover was $62.6 million in abbreviated trading.
The best performer on the index yesterday was Summerset Group, up 2 per cent to $4.08, with Orion Health rising 1.9 per cent to $3.20 and NZX up 1.9 per cent to $1.07. Orion is the worst performer on the NZX 50 for the year, down 45 per cent.
Chorus, which advanced 0.5 per cent to $3.91 yesterday, is up 46 per cent for the year. Rickey Ward, NZ equity manager at JBWere, said the stock had been hampered by lagging regulation, before rebounding after the regulator imposed less onerous pricing for access to its copper lines.
"What a turn-around for a stock no one wanted to own," Ward said. "All of a sudden it's an income-generating investment, which it should have been in the first place, after you had to wait how many years for regulatory clarity."
A2 Milk fell 9.7 per cent to a one-week low of $1.86, continuing Thursday's easing from its all-time high of $2.27 on December 29. The stock had more than doubled in value after it announced a second earnings upgrade for the year on December 17. It has risen 291 per cent this year off strong Chinese demand for infant formula, making it the top performer on the NZX 50 Index.
"Fundamentally I believe the market says it's well and truly overvalued, it doesn't deserve to be here," said JBWere's Ward.
"It seems to be flow and momentum-driven rather than anything fundamentally based. You try to talk to the company to get an idea of what they pay farmers for the cost of milk and they won't disclose - that's the biggest input cost, so how the hell do you value it? It's really hard. It's a bit like Xero, these are growth companies. They are growing, to their credit, but it's what multiple you want to pay on a company that is growing."
Growth companies come with risk, markets can often misprice risk but they do not like when you disappoint on growth, and growth companies at some stage do disappoint.
Property stocks fell yesterday, with Argosy Property down 3 percent to $1.145, Goodman Property Trust sliding 2 percent to $1.24, Vital Healthcare Property Trust slipping 1.1 per cent to $1.87, and Kiwi Property Group declining 0.7 per cent to $1.35.
Outside the benchmark index, Moa Group dropped 6.8 per cent to 69 cents after the craft beer brewer was asked to explain a 42 per cent rise in its stock price from 52 cents on December 24 to 74 cents on December 30. Moa told the stock market regulator it was meeting disclosure requirements and had nothing to add.
"They're not that well researched, when you see significant movements it's only natural that people will ask questions," Ward said. "If you're a large company and you have big moves, you tend to be able to get away with it because more people have an understanding of why the movements occurred. Today's fall is low volume in a company that not a lot of people follow these days."
Intueri fell 4 per cent to 72 cents. The stock has shed 74 per cent this year, making it the fourth-worst performer across the S&P/NZX All Index. It had hit a high of $3.30 in September 2014, four months after listing at $2.35, but has struggled this year, and has not traded above $3 since January.
"It's giving up some of those gains," Ward said. "There's been some speculation of a takeover, but Intueri's come out saying no they're not."
Across the All Index, Trilogy International is the best performer this year, climbing 277 per cent to $2.78, though it fell 1.8 per cent yesterday. The skincare and home fragrance company more than tripled first-half profit to $3.2 million as it benefited from growth across all its markets.