Ryman Healthcare’s plans in Australia’s Covid-19 hit state of Victoria prompt a note of caution, plus the Super Fund buys New Zealand’s major lab testing company

Victoria lockdown pushes Ryman Healthcare shares lower

Shares in Ryman Healthcare fell 2.3 percent yesterday after the company flagged potential disruptions to its operations in Victoria resulting from the new level 4 lockdown restrictions that have been imposed on the state. While the company said it was difficult to predict how the new restrictions would impact its target of delivering 900 beds and units in the 2021 financial year, it is expected to slow construction and push out completion dates.

The retirement village operator said work at its Nellie Melba, Burwood East and Aberfeldie construction sites will be significantly reduced over the next six weeks due to the lockdown restrictions. Construction on its Highton and Ocean Grove villages, which are outside Metropolitan Melbourne and are not subject to the restrictions, will be able to continue in the meantime.

Two of its existing villages, Weary Dunlop and Nellie Melba, have been in lockdown for the past four weeks with visiting restricted and full pandemic infection control measures in place. Ryman Healthcare shares closed at $12.90, down 30c.

Super Fund acquires 50 percent stake in major pathology provider

The NZ Super Fund and the Ontario Teachers’ Pension Plan Board are set to jointly acquire the Asia Pacific Healthcare Group from Australian based hospital provider Healthscope. The company provides pathology services to a large percentage of NZ’s population and employs more than 2,000 staff across its network of 25 laboratories and 150 collection centres. It has also been one of the major testing providers as part of the country’s response to covid-19.

Global asset management company Brookfield bought Healthscope – Australia’s second largest private hospital operator – last year for approximately US$4.1 billion. The NZ Super Fund said the fund had been seeking opportunities in the healthcare sector to drive innovation and add long term value. The deal is subject to approval from the NZ Overseas Investment Office.

Refining NZ announces likely impairment to first half earnings

Refining NZ will take an anticipated $158 million post-tax impairment charge in its first-half earnings, to be announced later this month. The charge results from reduced refining margins and excess refining capacity in the Asia-Pacific region as well as the effects of the Covid-19 pandemic on reduced transport fuel demand, particularly for jet fuel.

The company is currently undertaking a strategic review of its operations that is expected to all but close refining activity and will result in the Marsden Point facility, the country’s only refiner, becoming a fuels import terminal in the future. The move is likely to have a significant impact on the Northland economy given the refiner is one of the region’s largest employers.

Refining NZ shares have lost around two-thirds of their value since the start of the year and closed yesterday at 72c up 1c and above their low point in March of 62c.

New car sales buoyant

New car sales last month were up on the same month last year suggesting some consumers aren’t letting the slowing economy get to them. Latest Motor Industry Association (MIA) data showed there were 366 more new vehicles registered last month compared to July 2019.

MIA said a combination of returning New Zealanders buying cars and money that had been redirected from cancelled overseas holidays may account for some of the increase. However, despite July being stronger than expected, sales of new vehicles are still down 25 percent compared to the first seven months of last year. MIA believes the market is likely to remain tight for the rest of the year.

There were 35 percent fewer used passenger car sales in the first seven months of 2020 than 2019 and used commercial vehicle sales are also down by 35 percent.

Does not compute

In another one of those head scratching moments in the US that has many analysts shaking their heads in despair, shares of the new-look Kodak have surged 530 percent in the past five days following news that the US government will loan the company $765 million to help it produce drugs as part of a new pharmaceutical unit.

While Kodak has plenty of experience producing chemicals for the film business, there is no guarantee the company can easily morph into the decidedly more complicated and high-risk business of manufacturing pharmaceuticals. A pullback in its stock price in recent days suggests short sellers may be moving in.

Since going bankrupt in 2012, Kodak has previously dabbled in cryptocurrencies launching KODAKCoin in 2018 in a failed bid to gain a foothold in the fledgling sector. In recent weeks, millennial day traders have been bidding up the stock to extremely elevated levels. According to data from Robintrack, a firm that follows holding patterns of traders using popular investing app Robinhood, Kodak has been the most actively traded stock on the platform in recent days.

Australian wine exports slide

Australia’s wine exports fell 4.3 percent in the June quarter after Covid-19 restrictions reduced consumption at restaurants and bars globally and caused disruption to supply chains.

Wine Australia, the national body which oversees the industry, said that exports in the June quarter fell to A$716 million from A$748 million a year ago. This followed a fall of 6.6 percent to $522 million in the March quarter.

China remained Australia’s number one wine export customer with total sales dropping 1 per cent to A$1.2 billion, which represented the first annual decrease in exports to China in more than a decade. Several major Australian wine exporters have said they remain nervous about increasing geo-political tensions between the Chinese and Australian governments and the potential impact that may have on future trade.

Major UK gym chain collapses

Almost 2,600 staff in the hard-hit retail and leisure sectors face redundancy after the collapse of UK fitness and gym wear company DW Sports.

The company has been placed in administration, putting 1,700 jobs at risk. The group, founded by the former Wigan Athletic owner Dave Whelan, operates 73 gyms and 75 shops across the UK. It said its retail website would cease trading immediately, weeks after it announced plans to shut 25 of its stores as the coronavirus lockdown wiped out its income. Its remaining 50 shops will continue to trade temporarily but will begin closing-down sales in the coming days.

Meanwhile, the high-profile UK travel group Hays Travel has said it will make almost 1,000 of its staff redundant blaming government-imposed restrictions on travel to Spain for the job losses.

The company said the decision to impose a blanket ban on travel to Spain, rather than curbing holidays to affected regions, had led to the cancellation of “hundreds of thousands” of holidays. Hays Travel rescued the jobs of 2,500 Thomas Cook staff last year when the tour operator collapsed and, until recently, had been optimistic about avoiding pandemic-related job cuts.

US gun sales hit all time high despite economic slowdown

As the US grapples with an escalating crisis resulting from Covid-19 that has seen riots, looting and an increasing number of protests against lockdown measures, more and more Americans appear to be arming themselves as firearms dealers struggle to keep up with demand.

After setting an all-time record of 3.9 million background checks in June, the FBI conducted a further 3.6 million firearm checks last month making it the third highest month on record for checks since the bureau began keeping statistics in 1998. By comparison, the FBI conducted just over 2 million checks in July last year.

One other enduring pattern this year has been the order of states topping the list, with Illinois, Kentucky, Texas, Florida and California continually seeing the most background checks for the sale, transfer, or licensing of guns.

Andrew Patterson is Newsroom's Markets Editor and has worked for decades as a financial journalist, radio presenter and editor with Australia's ABC, Radio Live and NBR.

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