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Reporting season another boost for equities

Investors have little cause for concern for the future of New Zealand equities after the latest reporting season, analysts say.

Monday, September 12th 2016, 5:59AM

by Susan Edmunds

Overall, earnings grew 7.2%, beating forecasts.

Investment adviser Grant Davies said there were few disappointing results.

“The outlook for New Zealand equities is still positive, subject to outside market events, of course,” he said.

“With interest rates at all-time lows, the dividend yields on offer on the NZX are still relatively attractive. Long-term interest rates suggest any material increase in interest rates unlikely for the foreseeable future, so investors hanging out for the days of yore, when term deposits offered 6%, 7% or 8% are likely to be waiting some time. This will provide support for New Zealand equities as investors chase yield.”

Paul Richardson, of Mint Asset Management, said after such a long period of strong performance on the share market, the reporting season could best be described as benign. “The growth outlook is not huge but it’s certainly positive.”

Individual companies’ performance was less of a factor for their share price outlook than other forces at play in the global economy, he said. “Where do you go to invest?”

With many countries dealing with negative interest rates, and low returns because valuations were elevated, investors were looking for dividend yield, he said.

Any interest rates rises might affect the value of bonds, so investors were turning to shares as an opportunity for a return, even if it was low and potentially volatile, he said.

New Zealand’s market was likely to be buoyed by overseas buyers who saw it as one of the few that offered solid dividend yields with strong, well-managed companies, he said.

“It keeps ticking a few boxes and doesn’t look like falling off a cliff and it’s generally ticking along well, it’s as simple as that. It’s one of the times in the last couple of decades New Zealand has come up on global screens. There’s a risk that it will come to an end at some point but we don’t know when.”

Tags: equities

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.29 2.59 2.65
ANZ 4.44 2.89 3.25 3.39
ANZ Special - 2.29 2.69 2.79
ASB Bank 4.45 2.29 2.59 2.65
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.29 2.59 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 2.89 3.19 3.39
BNZ - TotalMoney 4.55 - - -
Lender Flt 1yr 2yr 3yr
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.50 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.40 3.50 -
HSBC Premier 4.49 2.25 2.35 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - 2.25 - -
ICBC 3.69 2.25 2.35 2.65
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.20 3.50 3.50
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.35 2.65 2.65
Liberty 5.69 - - -
Nelson Building Society 4.95 3.20 3.24 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
Lender Flt 1yr 2yr 3yr
SBS Bank 4.54 2.79 ▲2.99 ▲3.29
SBS Bank Special - 2.29 ▲2.49 ▲2.79
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The Co-operative Bank - First Home Special - 2.09 - -
The Co-operative Bank - Owner Occ 4.40 2.29 2.59 2.79
The Co-operative Bank - Standard 4.40 2.79 3.09 3.29
TSB Bank 5.34 3.09 3.29 3.45
TSB Special 4.54 2.29 2.49 2.65
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.09 3.29 3.39
Westpac - Offset 4.59 - - -
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Westpac Special - 2.29 2.69 2.79
Median 4.55 2.73 2.99 2.80

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