NZ sharemarket rises to mark 10-year bull run

New Zealand shares rallied into the 10th anniversary of the longest bull market in sharemarket history, gaining 0.9 per cent this week after central banks around the world indicate interest rates will remain low and might go even lower.

The benchmark S&P/NZX 50 Index gained 2.91 points, or 0.3 per cent, to 9440.27. Within the index, 22 shares rose, 8 were unchanged and 20 fell with turnover at $149.2 million.

Greg Smith, head of research at Fat Prophets, says that in a low interest rate environment, “higher income stocks are going to be even more in favour”.

The European Central Bank was the latest to abruptly change gears, downgrading its growth forecast for the euro area to 1.1 per cent for this year, down from its previous forecast of 1.7 per cent.

“The gentailers (electricity generators and retailers) are certainly in demand” because of their strong dividend yields, Smith said. Mercury New Zealand gained 3.5 cents, or 1 per cent, to $3.69 while Contact Energy climbed 3 cents, or 0.5 per cent, to $6.42.

Among other high-yielding stocks to benefit from falling interest rates, Auckland International Airport gained 6 cents, or 0.8 per cent, to $7.69, Vector advanced 4 cents, or 1.1 per cent, to $3.52 and Chorus rose 7 cents, or 1.3 per cent, to $5.49.

Spark was a major exception, its shares falling 7 cents, or 1.9 per cent, to $3.70 and it was the most heavily traded stock with 8.1 million shares changing hands.

Chorus was the second-most heavily traded with 2.5 million shares sold.

A2 Milk continues its stellar run, gaining

22 cents, or 1.5 per cent, to $14.72.

A2 shares have gained more than 32 per cent year-to-date compared with the Top

50’s 7.1 per cent gain and its 55 per cent jump in first-half net profit certainly didn’t hurt.

“It was obviously a very good result and it’s doing a lot better than many competitors,” Smith said.

Sky Network Television was the day’s biggest gainer, its shares rising 3 cents, or 2.3 per cent, to $1.33, but they are still down more than 28 per cent year to date as investors worry about new technologies eroding its franchise.

“That’s possibly a bit of a rebound with bargain hunters coming in,” Smith said, adding that Sky’s new chief executive, Martin Stewart, has a big task ahead of him.

It was the opposite story with cinema technology company Vista Group which was the day’s biggest decliner, sinking 13.9 cents, or 2.9 per cent, to $4 on trading of

207,544 shares. The last time more than

200,000 shares changed hands in one day was last December.