Weak price data boosts shares to record
Stocks climb as rate rise pressure eases for Reserve Bank
New Zealand shares hit a record as weaker CPI numbers bolstered shares, with dividend stocks like Mercury New Zealand and Trustpower benefiting.
The S&P/NZX 50 Index gained 7.76 points, or 1 per cent, to 7707.33. Within the index, 28 stocks rose, 15 fell and seven were unchanged. Turnover was $128.5 million.
Yesterday, Statistics New Zealand surprised the market when it reported that consumer prices were unchanged in the second quarter while annual inflation was 1.7 per cent. Expectations the central bank might soon join others that have lifted or are expected to lift rates soon have been stemmed by the softer numbers.
“We’re up slightly, against the trend, to another record high, and the first close above 7700,” said Mark Lister, head of private wealth re- search at Craigs Investment Partners.
“The key theme is the weakerthan-expected CPI numbers, that points to no need for the Reserve Bank to do anything over the foreseeable future. People are pricing in less inflationary pressures and that has propped the market up. As a high dividend market, lower interest rates are good for shares.” Dividend stocks were performing well, getting support from investor confidence around interest rates, Lister said, with up 2.1 per cent to $3.48 and gaining 1.4 per cent to
land Trustpower Mercury New Zea-
$5.66. “Other than that, people are biding their time waiting for the reporting season,” Lister said.
“The global reporting season is about to get really busy over the next two weeks, that’s important because it will give us some leads. We’re crossing our fingers we don’t see any profit warnings between now and then.”
Fisher & Paykel Healthcare
was the worst performer, down 1.8 per cent to $11.05. Managing director Lewis Gradon has sold almost half of his shares in the medical device maker, raising about $3.1m to help buy a house.
“If you see an important member of the management team selling, markets are only going to read negatives into that,” Lister said.
New Zealand Refining
rose 1.2 per cent to $2.46. In its throughput and margin report for May and June, the oil processor said it achieved a gross refinery margin of US$7.63 per barrel in the period, and got $58.4m in processing fees, up from $43.3m in the previous year.
“Volume growth was better than expected though they did lose a bit from the impact of currency movements,” Lister said.
rose 1 per cent to $7.98. The company yesterday reported its operating figures to June 30, which showed it sold 1000 million litres of fuel in the first quarter, up from 975 million litres the prior year.
Z Energy