Price climbs buck international trends

Spark defies RWC acrimony to end the day stronger

New Zealand shares rose, bucking international leads, as the prospect of persistently low interest rates continues to buoy the local equity market. Spark New Zealand defied negative reaction to end the day stronger.

The S&P/NZX 50 Index lifted 43.94 points, or 0.4 per cent, to 10,873.33. Within the index, 19 stocks rose, 27 fell, and four were unchanged. Turnover was $69.4 million, with just two stocks trading on volumes of more than a million shares.

The NZ and Australian markets were in the minority in posting gains across Asia, following a weaker lead from Wall Street when an apparent breakdown in trade talks triggered fears over global growth to re-emerge.

NZ and Australian central banks are expected to keep cutting benchmark interest rates, which has been a boon for equity markets in giving corporates cheap finance and boosting relative returns from stocks.

“If things are going well and they cut rates, that can be good for equity markets,” said Grant Davies, an adviser at a Hamilton Hindin Greene.

Spark was the most traded stock on the day on a volume of 3.1 million shares, below its 90-day average of 3.3 million. It rose 1.8 per cent to $4.43, defying a barrage of criticism that included Acting Prime Minister Winston Peters taking it to task over coverage of the opening All Blacks test at the Rugby World Cup.

“Spark started off a bit weaker in the morning but turned that around in the afternoon as people soon realised it was a bit of a storm in a teacup considering the size of the overall company,” Davies said.

Industry analysts said it put the telco on the back foot in making the case for live-streaming services, and may make some sporting organisations demand greater security in future rights arrangements. Sky Network Television, which was trumped by Spark for the World Cup rights, rose 1.8 per cent to $1.16 on a volume of 2.2 million shares, almost three times its 791,000 average.

Davies warned against reading too much into the shifts for those stocks, which was within trading norms.

Auckland International Airport led the market higher, up 2 per cent at $9.31, with 351,000 shares changing hands, about a third of its 1.1 million average. Mainfreight rose 1.8 per cent to $39.70 and Z Energy was up 1.4 per cent at $5.63.

A2 Milk Co rose 1.3 per cent to $13.70 after appointing Qantas executive Race Strauss as its next chief financial officer.

Synlait Milk rose 0.2 per cent to $9.50 after the dairy company processed its first milk at its Pokeno facility. The dairy company also entered into a four-year $50m loan with ANZ linked to environmental, social and governance criteria.

Chorus fell 4.3 per cent, or 22.5c, to $5.075, with 221,000 shares changing hands, less than half its 582,000 average. The network operator shed rights to a 13.5c dividend yesterday.

Vector was down 1.4 per cent at $3.55 after telling shareholders it’s lobbying the Commerce Commission to better account for the low interest rate environment.

The lines company’s regulated revenue is based on calculations linked to interest rates, meaning low rates can reduce its potential income.