Sharemarket edge lower as investors await earnings season
The S&P/NZX 50 Index decreased by 1.09 points, or 0.01 percent, to 10,873.21. Within the index, 24 stocks fell, 20 rose, and six were unchanged. Turnover was $114.2 million, with just five companies trading on volumes of more than a million shares.
The benchmark index went through a volatile week as a sell-off on trade tensions between the US and China spooked global markets, only to be reversed on Wednesday when the Reserve bank unexpectedly cut the official cash rate 50 basis points to a record low 1 percent. New Zealand's relatively high dividend yield has made it an attractive investment destination, and a weaker currency only added to the lustre by making local stocks cheaper for foreign buyers.
"The rate cut has reinforced the focus back on yield. As long as companies don't make any murmurings about adjusting their payouts, things will be pretty good," said Greg Smith, head of research at Fat Prophets.
Contact Energy kicks off the reporting season proper when it announces its annual result on Monday. It rose 2.1 percent to $8.30 on a volume of 1.4 million shares, more than its 90-day average of 1 million. The stock is trading at a dividend yield of 4.4 percent, and Smith said investors will be watching capital spending intentions. Meridian Energy, which is trading at a yield of 3 percent, rose 2.5 percent to $5 on a volume of 1.3 million.
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