Market commentaries
AUCKLAND: New Zealand shares followed international markets higher as the lowinterestrate environment continues to see investor demand for yield stocks.
The S&P/NZX 50 Index rose 71.37 points, or 0.65%, to 10,996.99. Within the index, 24 stocks rose, 19 fell and seven were unchanged. Turnover was light at $92.18 million.
‘‘The S&P 500 was up half a percent and the US and European markets, for the most part, were up, so there was a positive lead and the market took a while to get going this morning,’’ Grant Davies, an investment adviser at Hamilton Hindin Green said.
‘‘The key news for today is Kathmandu’s purchase of Rip Curl which is a reasonablesized acquisition and looks to be a good one given the company’s core competencies,’’ Mr Davies said.
Kathmandu shares are in a trading halt as the outdoor clothing retailer completes an entitlement offer to raise $145 million for the deal. The company will pay $368 million to buy the surf brand which it says will create a billiondollar retailer and add at least 10% to earnings per share.
Briscoe Group, which owns 20% of Kathmandu, saw its share price fall by half a percent to $3.62 as the company decides whether to take part in the capital raise.
Mr Davies said the running story at the moment was really the lowinterestrate environment and demand for yield stocks, especially as there was talk of a further Official Cash Rate cut in November.
Yesterday the Reserve Bank of Australia decided to lower its cash rate by 25 basis points to 0.75%, as expected by economists. RBA governor Philip Lowe indicated an extended period of lowinterest rates will be needed in Australia.
The announcement was made after the NZ market closed. The ASX 200 was trading higher throughout the middle of the day and was up by 0.17% to 6699.40 yesterday afternoon.
On the NZX strong yielding stocks such as Mercury Energy and Spark performed well, with the electricity firm up 2.79% to $5.15 and the telco up 1.8% to $4.49 off a volume of 2.3 million shares. Spark was the secondmost traded company yesterday.
Goodman Property Trust was the volume leader yesterday, with its price up 0.23% to $2.2 off almost 3.6 million shares traded.
Sky Network Television rose by 1.79% to $1.14 after it announced the appointment of Neil Martin as the new global chief executive of RugbyPass.
The Australian sharemarket yesterday enjoyed its best day in nearly a month following the Reserve Bank’s decision to cut the cash rate for a third time this year.
The benchmark S&P/ASX200 index finished up 54.5 points, or 0.81%, to 6742.8 points, while the broader All Ordinaries rose 52.4 points, or 0.77%, to 6853 points.