Shares climb as Sky TV leads the way
Investors speculate over chance of a cut to official cash rate
New Zealand shares rose as investors weigh up the prospect of a potential rate cut, spurring demand for stocks with high dividends. Sky Network Television, Spark New Zealand and Chorus gained.
The S&P/NZX 50 index gained 34.86 points, or 0.4 per cent, to 9292.15. Within the index, 32 stocks gained, 14 fell and four were unchanged. Turnover was $124.4 million.
Traders are pricing in a 50 per cent chance New Zealand’s Reserve Bank will cut the official cash rate in an effort to lift inflation. Low interest rates have been a long-standing support for the domestic market, where investors can find relatively stable returns from the likes of utilities and property investment firms.
“We’ve got potential for a rate cut” with the global economy in “pretty reasonable shape” which is “buoying the market,” said Grant Davies, an investment adviser at Hamilton Hindin Greene in Christchurch. “We find ourselves in this situation where people are expecting the worst is about to happen because it’s been so long since things have gone wrong.”
Sky TV led the market higher, rising 3.6 per cent to $2.28, as it bounced back for a second day after a 19 per cent decline through the tailend of August. Spark rose 1.8 per cent to $4.01 after Vodafone New Zealand reported a decline in annual earnings as its margins were squeezed by an increasingly competitive broadband market. Network operator Chorus rose 1.6 per cent to $4.72. Mercury NZ rose 1.5 per cent after its joint venture with Infratil was granted approval by Australia’s Foreign Investment Review Board to buy Tilt Renewables. Infratil increased 0.3 per cent to $3.425. Tilt shares increased 0.9 per cent to $2.30.
Contact Energy rose 0.5 per cent to $5.58 after appointing Westfield Milk Products’ Dorian Devers as its new chief financial officer.
Kathmandu Holdings fell 1.5 per cent to $3.20, the biggest fall on the day. The retailer is scheduled to report annual earnings on September 18. Westpac Banking Group fell 0.9 per cent to $30.82 after reaching a A$35m ($38.3m) deal with the Australian Securities and Investments Commission, settling potential litigation over approving 10,500 loans between 2011 and 2015 that should have been referred to a credit officer.
Australia & New Zealand Banking Group fell 1.3 per cent to $31.38.