tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Monday, February 26th, 6:34PM

Investments

rss
The Markets

Investors chasing yield push the sharemarket higher

New Zealand shares rose, led by companies offering reliable dividends such as Stride Property, as the Reserve Bank reaffirmed its commitment to near-zero interest rates. A weaker currency also boosted the fortunes of exporters including Pushpay Holdings and A2 Milk.

Wednesday, June 24th 2020, 6:11PM

by BusinessDesk

The S&P/NZX 50 Index advanced 126.83 points, or 1.1 percent, to 11,259.41. Within the index, 28 stocks rose, 18 fell, and four were unchanged. Turnover was $163.6 million.

The Reserve Bank today kept the official cash rate at 0.25 percent and maintained the size of its quantitative easing programme at $60 billion, while noting that it may roll out more tools to support the economy. The central bank also tried to jawbone down the currency, saying it was elevated and weighing on export earnings.

The kiwi dollar gave up earlier gains, ending the local trading session largely unchanged at 64.60 US cents at 5pm in Wellington, and weaker against its trans-Tasman counterpart at 93.07 Australian cents.

Perpetually low interest rates have been a key driver in pushing share prices higher as investors seek income at a time when returns on term deposits barely keep up with inflation.

Matthew Goodson, managing director at Salt Funds Management, said the central bank's announcement was “no great surprise,” but was still driving demand among investors who are buying stocks irrespective of the price.

“Interest rates are incredibly low for a reason,” Goodson said. “But certainly, they have pushed people into the equity market.”

“Valuation multiples are at never-before-seen levels and the risks as to whether a company can deliver that top line revenue and earnings are certainly still there.”

Stride Property led the market higher, gaining 8.3 percent at $1.82. The property investor yesterday said it plans to maintain its dividend payments, and Jarden research analysts upgraded their rating on the stock to 'outperform' with a target price of $2.07.

“Stride is really standing out in the property space,” Goodson said. “It was up a little yesterday following the result, but a couple of analyst upgrades seem to have sparked a lot of retail investor buying in the name.”

Among other yields stocks, Argosy Property rose 2.1 percent to $1.195, and Spark New Zealand advanced 3 percent to $4.57.

Ryman Healthcare rose 5.1 percent to $13.39, recovering from a decline yesterday. Goodson said there had been a spate of new covid-19 infections in the Australian state of Victoria, where Ryman owns a number of properties.

Pushpay rose 5 percent to $9.30, having more than doubled so far this year. The mobile payments company generates most of its revenue in US dollars, and benefits from a weaker NZ dollar.

“Pushpay has been run up sharply as aggressive small cap managers chase it; now it has a remarkable market cap of almost $2.6 billion,” Goodson said.

Other exporters to gain today included Fisher & Paykel Healthcare, which was up 2.6 percent at $31.05, and A2 Milk, rising 1.8 percent to $19.40.

Goodson said travel-related stocks continued to decline due to the revival of covid-related fears and low expectations for a trans-Tasman bubble being opened any time soon.

Air New Zealand fell 3.1 percent to $1.40, the day’s biggest fall, Auckland International Airport declined 1.2 percent to $6.37 and Tourism Holdings dropped 1 percent to $1.92.

Tags: Market Close

« NZ shares fall as Ebos shareholder sells down; covid jitters remainCovid fears cast pall on sharemarket (again); Air NZ drops »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

AM Update - Your morning business news update

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.45 7.05 6.85
ANZ 8.64 7.99 7.49 7.35
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.39 6.89 6.75
ASB Bank 8.64 7.39 6.89 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - ▼7.29 ▼6.85 ▼6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 ▼7.89 ▼7.45 ▼7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.15 - -
Co-operative Bank - Owner Occ 8.40 7.35 6.89 6.75
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.85 7.39 7.25
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.85 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.59 7.29
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.35 7.89 7.65
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.35 6.89 6.75
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.90 7.39 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.30 7.89 7.69
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.30 8.89 8.69
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.95 7.45 7.29
SBS Bank Special - 7.45 6.95 6.79
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 7.05 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.19 7.55 7.55
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.39 6.75 6.75
Unity 8.64 6.99 6.85 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 7.15 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.45 7.37 6.77

Last updated: 26 February 2024 9:10am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com