The marketplace
AUCKLAND: New Zealand shares rallied into the 10th anniversary of the longest bull market in sharemarket history, gaining 0.9% this week after central banks around the world indicated interest rates will remain low and might go even lower.
The benchmark S&P/NZX 50 Index gained 2.91 points, or 0.3%, to 9440.27 yesterday. Within the index, 22 shares rose, eight were unchanged and 20 fell with turnover at $149.2 million.
Greg Smith, head of research at Fat Prophets, said that in a low interest rate environment, ‘‘higher income stocks are going to be even more in favour’’.
The European Central Bank was the latest to abruptly change gears, downgrading its growth forecast for the euro area overnight New Zealand time to 1.1% for this year, down from its previous forecast of 1.7%.
‘‘The gentailers [electricity generators and retailers] are certainly in demand’’ because of their strong dividend yields, Smith said. Mercury New Zealand gained 3.5c, or 1%, to $3.69. Contact Energy climbed 3c, or 0.5%, to $6.42.
Among other high yielding stocks to benefit from falling interest rates, Auckland International Airport gained 6c, or 0.8%, to $7.69, Vector advanced 4c, or 1.1%, to $3.52 and Chorus rose 7c, or 1.3%, to $5.49.
Spark was a major exception, its shares falling 7c, or 1.9%, to $3.70 and it was the most heavily traded stock with 8.1 million shares changing hands, up from the 4.65 million daily average over the last 90 days.
Smith said investors were still disappointed with Spark’s 5.6% drop in firsthalf net profit, even though the telecommunications company was paying a 1.5c special dividend on top of its 11c ordinary dividend.
Chorus was the secondmost heavily traded with 2.5 million shares sold yesterday.
A2 Milk continued its stellar run, gaining 22c, or 1.5%, to $14.72 yesterday, although that was a little down from the record $15 reached earlier this week.
A2 shares have gained more than 32% yeartodate compared with the Top 50’s 7.1% gain and its 55% jump in firsthalf net profit certainly didn’t hurt.
A2’s performance over the past few years has been propelled by the success of its infant formula sales in China.
‘‘The markets are largely pricing in a resolution’’ to the trade war between the US and China and certainly there have been no signs yet that A2 has been affected,’’ Smith said.
‘‘But also with A2, you’ve got an emerging US story as well,’’ he said.
A2 was now selling fresh milk in more than 12,400 stories in the US where firsthalf revenue more than doubled.
Sky Network Television was the day’s biggest gainer, its shares rising 3c, or 2.3%, to $1.33, but they’re still down more than 28% year to date as investors worried about new technologies eroding its franchise.
‘‘That’s possibly a bit of a rebound with bargain hunters coming in,’’ Smith said, adding that Sky’s new chief executive, Martin Stewart, had a big task ahead of him.
It was the opposite story with cinema technology company Vista Group which was the day’s biggest decliner, sinking 13.9c, or 2.9%, to $4 on trading of 207,544 shares.
The last time more than 200,000 shares changed hands in one day was last December.
It wowed investors last week with its 26.7% jump in firsthalf net profit and the shares were still up 4.7% since the announcement.
Australian shares have hit the skids over concerns about a global growth slowdown, with nearly every sector on the local bourse in the red.
The benchmark S&P/ASX200 index was down 60.1 points, or 0.96%, to 6203.8 points yesterday, while the broader All Ordinaries was down 57.1 points, or 0.9%, at 6287.1.
It followed losses on the United States and major European markets overnight after the European Central Bank slashed its 2019 growth and inflation forecasts.
Every sector was lower aside from property trusts, which was up marginally.
It was worst day for the ASX200 since January 2, but overall the market still closed up 0.18% for the week.
The financial sector was the worst hit, down 1.58%.
ANZ was down 2.27%, CBA down 2.01%, Westpac down 1.32% and NAB down 1.13%. — BusinessDesk/AAP