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The Markets

NZX50 hits record; prospect of lower rates drives yield hunt

The S&P/NZX 50 Index hit a record, amid a global rally, as investors prepare for even lower interest rates and pursue stocks offering reliable dividends. Blue-chip companies such as Auckland International Airport were among today's gainers.

Wednesday, June 19th 2019, 6:08PM

by BusinessDesk

The benchmark index rose as high as 10,309.89, and ended the day at 10,304.83, up 113.50 points, or 1.1 percent. Within the index, 30 stocks gained, 17 fell, and three were unchanged. Turnover was $130.5 million.

European Central Bank president Mario Draghi spurred demand for equities after indicating easier monetary policy was on the cards in Europe, while investors awaiting the Federal Reserve's latest policy meeting also expect the world's biggest central bank will indicate a track for lower interest rates. China's Shanghai Composite Index was up 1.5 percent in afternoon trading, while South Korea's Kospi 200 Index rose 1.4 percent, and Australia's S&P/ASX 200 Index increased 1.1 percent.

"It's a continuation of interesting times where central banks are a little bit like Sisyphus really - they're doomed to rolling the great stone uphill for all eternity trying to achieve 2 percent inflation which they can't at present," said Matt Goodson, managing director at Salt Funds Management.

"With rates being so low, clearly people are clustering towards dividend-paying stocks with relatively certain top-lines and high growth stocks which have little in the way of earnings so will find it difficult to disappoint."

The biggest companies on the benchmark index were among the top performers today. Fisher & Paykel Healthcare led the market higher, up 3.2 percent at $15.40 on 347,000 shares, about half its 90-day average of 647,000. A2 Milk increased 1.2 percent to $14.41 on 603,000 shares, below its usual volume of 818,000.

Auckland Airport rose 3 percent to $9.03 on 996,000 shares, down on its usual 1.3 million, while Meridian Energy increased 2.7 percent to $4.62 on 1.1 million shares, down on its 1.4 million average.

Property stocks also fared well on busier trading volumes than normal. Precinct Properties New Zealand rose 2.7 percent to $1.73 on a volume of 1.5 million shares, Kiwi Property Group increased 1.9 percent to $1.60 with 2.1 million shares changing hands. Goodman Property Trust advanced 1.6 percent to $1.90 on a volume of 1.3 million.

Pushpay Holdings climbed 2.6 percent to $3.90 on a volume of 1.3 million, more than twice its usual activity. The mobile payments app developer raised its full-year earnings guidance at today's annual meeting.

Spark New Zealand was the most traded stock on a volume of 2.8 million shares, down on its 5.4 million average. It rose 0.1 percent to $3.915. New Zealand Refining decreased 0.5 percent to $2.09 on 1.1 million shares, more than five times its 210,000 average.

Of other stocks trading on volumes of more than a million shares, Infratil rose 1.3 percent to $4.65, Contact Energy fell 0.4 percent to $7.59, Fletcher Building decreased 0.2 percent to $5.43, and Ryman Healthcare increased 1 percent to $11.70.

Tourism Holdings posted the day's biggest decline, down 2.3 percent at $3.85 on 58,000 shares, almost a third of its normal volume. Synlait Milk declined 2.1 percent to $9.89 on a volume of just 13,000 shares - a tenth of its usual trading - and Oceania Healthcare fell 1 percent to $1.03 on 228,000 shares.

NZX was unchanged at $1.09 after medicinal cannabis firm Cannasouth joined the exchange in the first initial public offering in more than two years. Napier Port is mooted as a potential candidate listing next month.

Cannasouth sold 20 million shares at 50 cents each in its priority and public offers, and first traded at 51 cents. However, the stock dropped as low as 36 cents and ended the day at 40 cents, with about 1.4 million shares of its 102 million stock on issue changing hands.

Grant Davies, an investment advisor at Hamilton Hindin Greene, said investors in pre-revenue companies should view them as a long-term investment.

Of other early-stage healthcare companies, bladder cancer test maker Pacific Edge rose 10 percent to 22 cents, cervical cancer tech company TruScreen advanced 4.8 percent to 11 cents, and probiotic manufacturer Blis Technologies was unchanged at 3.7 cents.

Heartland Bank's 2024 bond paying annual interest of 3.55 percent was the most traded debt security on a volume of 2.2 million. The notes closed at a yield of 3.14 percent, down 2 basis points. Heartland Group shares rose 2.5 percent to $1.64.

Of other debt securities trading on volumes of more than a million notes, ANZ Bank New Zealand's 2024 bond, paying 3.03 percent, closed at a yield of 2.3 percent, down 4 basis points. Transpower's 2022 notes paying 4.3 percent closed at 1.81 percent, down 8 basis points, and Auckland Airport's 5.52 percent 2021 notes closed at 1.86 percent, down 16 basis points.

Tags: Market Close

« NZ shares gain as investors eye upcoming Fed meetingBlue-chip shares give up recent gains, Infratil sheds dividend »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 3.89
BNZ - Classic - 3.55 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 4.30 4.20 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.55 3.45 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - ▼3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.04 4.09 4.39

Last updated: 11 November 2019 4:01pm

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