Power firms lead charge as shares climb

Low interest rates keeping focus on dividend-payers

New Zealand shares rose as the low interest rate outlook continues to add to the lustre of companies with reliable dividends such as Contact Energy and Meridian Energy.

The S&P/NZX 50 Index rose 42.80 points, or 0.4 per cent, to 10,800.00. Within the index, 29 stocks rose, 10 fell, and 11 were unchanged. Turnover was $87.8 million.

Stocks across Asia were mixed as

investors assess the impact of the new trade tariffs imposed between the US and China.

The trade war between the world’s two biggest economies has stoked volatility in markets and encouraged central bankers to keep interest rates low.

That, in turn, has made stock markets such as New Zealand more attractive due to the dominance of utilities and property companies that pay reliable dividends.

Among those yield plays, Contact rose 2.9 per cent to $8.62 and Meridian was up 1.8 per cent at $5.07. Property For Industry increased 1.5 per cent to $2.39 and Vector advanced 1.4 per cent to $3.61.

“We’ve got negative interest rates in Europe, and here term deposits are near enough — once you pay tax and inflation you’re not going far,” said Grant Davies, an investment adviser at Hamilton Hindin Greene.

ANZ Bank New Zealand’s 2021 bond paying annual interest of 4 percent was the most traded debt security on a volume of 320,000. It closed at a yield of 1.34 per cent.

Ryman Healthcare led the market higher, up 3.2 per cent at $13.43. Of other retirement village operators, Arvida Group increased 1.5 per cent to $1.36, Metlifecare increased 0.2 per cent to $4.36, Summerset Group fell 0.7 per cent to $6, and Oceania Healthcare was unchanged at $1.03.

Davies said the weaker New Zealand dollar — trading near four-year lows — supported exporters. Skellerup increased 2.7 per cent to $2.29, Pushpay Holdings rose 1.6 per cent to $3.10 and Fisher & Paykel Healthcare was up 1.4 per cent at $16.89.

Precinct Properties New Zealand was the most traded stock on a volume of 2.2 million shares, more than twice its 912,000 average. It was unchanged at $1.865. Kiwi Property

Group was also unchanged at $1.63.

Spark New Zealand fell 0.2 per cent to $4.41.

Vista Group International posted the day’s biggest decline, down 2.7 per cent at $3.93 on a volume of 1.5 million shares, more than three times its 443,000 average.

Fletcher Building decreased by 0.7 per cent to $4.41. Fonterra Shareholders’ Fund units increased 0.3 per cent to $3.32. Fonterra Cooperative Group’s biggest shareholder, Colin Armer, yesterday said he’s lodged a complaint with the Financial Markets Authority over the dairy exporter’s accounts.

Fonterra will report its annual earnings next week and is poised to post a loss of up to $675m.

Synlait Milk reports the same day as Fonterra. It fell 0.5 per cent to $9.30.

Infratil was unchanged at $4.55 after completing the sale of NZ Bus to Next Capital. It said it’s received upfront cash of $93m, with earn-outs and vendor finance paid over the next five-and-a-half years.