The sharemarket put on a stellar performance over the June quarter, thanks mostly to a few high-profile stocks that find themselves in a fortunate position right now.
Respiratory products maker F&P Healthcare, riding high after posting a strong net profit and a bullish earnings outlook for the current year, this week hit $20 billion in market capitalisation for first time.
The price of the market's number two stock, a2 Milk, has not fared as well but has nevertheless remained elevated.
• Premium - Why F&P Healthcare continues to break through new highs
• Premium - Will Fisher and Paykel Healthcare benefit from the coronavirus outbreak?
• F&P Healthcare profit up 37 per cent - a record - sees big lift in 2021
• Premium - F&P Healthcare's Covid moment, Rich Listers buy into House of Travel
Despite the current economic difficulties, the S&P/NZX50 gained 5.23 per cent in the month of June, with F&P, a2 Milk and Ryman being responsible for 77 per cent of that gain, according to data from Fisher Funds.
For the June quarter, the index gained 16.91 per cent.
The usual suspects — F&P Healthcare and a2 Milk - and Auckland International Airport were responsible for 39 per cent of that gain.
But for the year to June, the equation gets even more lopsided.
The S&P/NZX50 index rose 9.05 per cent over the year, with F&P Healthcare, a2 Milk and Spark driving 186 per cent of that return.
"The key thing catching our eye is how much of the S&P/NZX50's return - and indeed global stock market indices - have been driven by a select handful of companies over the last month, quarter and year," said Fisher Funds senior portfolio manager Sam Dickie.
Ryman Healthcare's uphill battle to get residents, staff tested for Covid-19
Auckland Airport's $50-$90m Covid hit, more job losses
"The top three performers in the S&P/NZSX50 have driven 77 per cent, 39 per cent and 188 per cent of the return of the index over the past one month, three months and 12 months respectively," he said. "That is extraordinary."
Dickie argues that the numbers back the case for active management in the current environment.
"It is critical to hand-pick a small number of high-quality companies always, but especially so in this environment," he said.
These stocks belie the struggles being experienced by a raft of stocks further down in the pecking order.
Fletcher Building is still floundering in the Covid-19 aftershock, but the stock surged this week on the back of news that it would pay back some of its more expensive debt.
The company said it would spend $350 million on repaying US private placement (USPP) notes issued in 2012 and due to mature in 2022 and 2024. The notes were the company's most expensive source of debt, with an average cost of funding of 5.4 per cent.
Their repayment will reduce Fletcher Building's funding costs by about $17m per year.
Early repayment costs are more than offset by the avoidance of $40m of future interest payments.
Fletcher Building also got a boost when it announced that cost over-runs on the Puhoi -to-Warkworth motorway extension would attract $85m in compensation.
Air NZ remains in a holding pattern while its competitor across the Tasman takes full advantage of investors' appetite for risk.
Qantas was able to raise A$1.36b ($1.4b) from an institutional placement and yesterday embarked on a A$500m share purchase plan.
Air NZ is considering various funding options, including a potential capital raising.
The company has a $900m funding facility, courtesy of its majority owner - the Government - but at high rates of interest.
Air NZ has said that it continues to assess its capital structure and the options available to it.
Adding to the long list of those struggling to find any traction are Sky Network TV and Vista.
Sky TV raised $157m in May to help it withstand the impacts of Covid-19. The stock last traded at 15c, down from 37c at the start of the year.
Vista, last year's matinee idol, has suffered Covid-19 fallout as movie theatres around the world keep their doors closed.
Shares in the company, which specialises in software for cinemas, closed at $1.39, having peaked in 2019 at $5.73.
The table for the Brokers' Picks mid-year update feature, in Wednesday's edition, included Aust Found in the picks made by MSL Capital Markets. In fact, it should have been AFT Pharmaceuticals. The error did not affect the results.