Mainfreight stars as shares track higher

A2 among biggest gainers as exporters remain in demand

New Zealand shares extended their gain as Mainfreight and a2 Milk Co hit highs on strong demand for the export-focused stocks that have reliably outperformed expectations. Sky Network Television led the market higher.

The S&P/NZX 50 Index rose 42.56 points, or 0.4 per cent, to 10,867.25. Within the index, 21 stocks increased, 18 fell, and 11 were unchanged. Turnover

was $83.7 million. The benchmark index gained for a fifth day as the international environment for low interest rates continues to drive demand for equities, especially stocks paying reliable dividends.

Heavyweight stocks Mainfreight and a2 were among the day’s biggest gainers as investors remained optimistic both firms will continue their track record of beating expectations.

Mainfreight rose as high as $42.73 and ended the day up 2.5 per cent at a record close $42.02.

“It just shows you if you’re a good company that keeps delivering, you’re going to be rewarded,” said Rickey Ward, NZ equity manager at JBWere.

A2 climbed 1.9 per cent to $17.45, having hit an all-time high $17.57. Ward said a2 was another company that has attracted strong support heading into next month’s earnings season, with investors anticipating it will continue its trend of underpromising and over-delivering.

Sky TV led the market higher for a second day, up 3.3 per cent at $1.26. The shares hit a record low last week.

Electricity generator-retailer shares were largely unmoved by the Electricity Authority’s new transmission pricing methodology, which aims to charge consumers based on the benefit they receive from transmission projects.

Ward said the low interest rate environment trumped potential regulatory impacts, as investors are pushed into taking on equity risk to maintain a stable return on investment. Genesis Energy rose 0.9 per cent

to $3.44, Meridian Energy increased 0.2 per cent to $4.94, Trustpower was unchanged at $7.50, Mercury NZ was unchanged at $4.75 and Contact

Energy decreased 0.5 per cent to $7.81. Lines company Vector was unchanged at $3.86. Stride Property was the most traded stock on a volume of 1.8 million shares, well up on its 277,000 average. It was unchanged at $2.25. Spark New Zealand increased 0.4

per cent to $3.905. Kiwi Property decreased 0.3 per cent to $1.61.

Infratil rose 0.2 per cent to $4.76. Synlait Milk posted the day’s biggest fall, down 1.5 per cent at $9.65. Push pay declined 1.5 per cent to $3.40, Gentrack was down 1.3 per cent at $5.97 and Fletcher Building decreased 1.2 per cent to $4.86. Outside the benchmark index, PGG Wrightson fell 1.8 per cent to 54 cents after shareholders approved a $234m capital return from the sale of its seeds division to DLF Seeds.

ANZ Bank New Zealand’s September 2020 bond paying annual interest of 4.03 per cent was the most traded debt security on a volume of 492,000. The notes closed at a yield of 1.64 per cent, down 10 basis points. Dual-listed parent Australia & New Zealand Banking Group’s shares rose 1.1 per cent to $28.63.