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The Markets

NZ shares gain as yields remain attractive in low rate environment

New Zealand shares rose as high dividend yields from the likes of Spark New Zealand and NZX remain attractive for investors in a low interest rate environment.

Tuesday, September 18th 2018, 5:48PM

by BusinessDesk

The S&P/NZX 50 index advanced 44.24 points, or 0.5 percent, to 9,315.77. Within the index, 35 stocks gained, 12 fell and three were unchanged. Turnover was $137.5 million.

Stocks across Asia were muted in afternoon trading as investors were wary of the impact US President Donald Trump's latest tariffs on Chinese imports will have on global growth. Futures pricing pointed to a small decline on Wall Street. Still, New Zealand's market shrugged off those concerns with relatively high dividend yields attractive for investors.

Spark gained 1.9 percent to $4.06, a yield of 6.3 percent, NZX rose 1.8 percent to $1.11, a yield of 7 percent, Genesis Energy advanced 1.8 percent to $2.55, with a yield of 6.7 percent, and Meridian Energy increased 1.5 percent to $3.35, a yield of 5.8 percent.

Grant Williamson, a director at Hamilton Hindin Greene, said the power companies were still benefiting from last week's electricity price review paper, which removed a fear of government intervention.

"The market continues to be underpinned particularly with the low interest rate environment," he said. "Business confidence might be dimming, but it's not flowing through to the stock market."

Sky Network Television rose 2.9 percent to $2.12, leading the market higher. The pay-TV operator has been trading near a post-Independent News Ltd merger low ahead of the stock's exit from the S&P/ASX 300 index at the end of the week.

Auckland International Airport increased 2.5 percent to $7.145 after announcing plans to raise money through a retail bond. A number of listed companies have turned to the debt market as an alternative to cheap finance.

Exporters Comvita rose 2.6 percent to $6.30 and Fisher & Paykel Healthcare gained 1.5 percent to $15.32. Mainfreight, which has operations spanning Europe and North America, gained 0.5 percent to $29.50.

Kathmandu Holdings rose 1.6 percent to $3.23 after reporting a 33 percent increase in annual profit, as expected. The retailer outlined plans for a dual-brand strategy in expanding in the US and Europe. Shareholder Briscoe Group fell 0.9 percent to $3.50 ahead of its own result on Thursday.

Synlait Milk fell 1.3 percent to $12.78 ahead of its annual result due tomorrow. Partner A2 Milk Co declined 1.2 percent to $12.14.

Tourism Holdings dropped 2.8 percent to $5.24, extending its quarterly decline to 22 percent. First NZ Capital today affirmed its 'underperform' rating on the stock and held its target price at $5.09.

Arvida Group gained 0.8 percent after the retirement village operator said there wasn't much spillover from the cooling property market with resale margins still widening.

Outside the benchmark index, Future Mobility Solutions was unchanged at 11.6 cents after a claim alleging it breached fair trading and defamation laws was filed in the High Court. The dispute originates from a disagreement on intellectual property rights.

Pyne Gould Corp gained 6.3 percent to 34 cents after the asset manager re-filed a claim against Bath Street Capital over a disputed deferred payment, which had been dropped two years ago. Bath Street will defend the litigation and file its own suit.

Tags: Market Close

« MARKET CLOSE: NZ shares mixed as index rebalancing looms; Pushpay, A2 gainNZ shares shrug off Synlait slump, join global rally »

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Lender Flt 1yr 2yr 3yr
ANZ 5.79 4.55 4.79 4.99
ANZ Special - 4.05 4.29 4.49
ASB Bank 5.80 4.44 4.69 4.89
ASB Bank Special - 3.95 4.29 4.49
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.10 4.29 4.49
BNZ - Std, FlyBuys 5.90 4.69 4.79 4.99
BNZ - TotalMoney 5.90 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.15 5.20 5.25 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.70 4.85 -
Housing NZ Corp 5.80 4.69 4.79 4.79
HSBC Premier 5.89 3.99 4.19 4.69
HSBC Premier LVR > 80% - 3.79 - -
HSBC Special - - - -
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.55 4.69 4.99
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.05 4.29 4.49
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special - - - -
SBS Bank 5.89 4.85 5.05 4.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.19 3.95 4.49
Sovereign 5.90 4.45 4.69 4.89
Sovereign Special - 3.95 4.29 4.49
The Co-operative Bank - Owner Occ 5.75 4.10 4.35 4.49
The Co-operative Bank - Standard 5.75 4.60 4.85 4.99
TSB Bank 5.80 4.45 4.69 4.99
TSB Special - 3.95 4.19 4.49
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.69 4.79 5.19
Westpac - Offset 5.95 - - -
Westpac Special - 4.15 4.29 4.59
Median 5.89 4.50 4.69 4.79

Last updated: 2 December 2018 8:39pm

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