Thought of life beyond lockdown lifts prices

New Zealand shares rose as stocks exposed to consumer leisure sectors found support with coronavirus restrictions set to ease, led by pay-TV operator Sky Network Television.

The S&P/NZX 50 index increased

46.36 points, or 0.4 per cent, to

10,695.59. Within the index, 21 stocks rose, 26 fell, and three were unchanged. Turnover was $181.1 million.

Firms hamstrung by Covid-19 containment picked up more support as investors rallied around stocks with exposure to the leisure sector, with the prospect of looser restrictions allowing more activities.

“Some of the consumer discretionary assets have had a bit of a recovery as there is a freeing up of the economy here and in Australia,” said Shane Solly, a portfolio manager at Harbour Asset Management.

Sky TV led the market higher, rising 6.7 per cent to 32c as investors anticipated professional sport resuming under level 2. The pay-TV operator’s biggest asset has been its grip on premium sports rights, something it’s had to do without through the lockdown.

“Undoubtedly, sports content is the lifeblood of Sky TV, so getting some content back in the form of rugby and netball must be a huge relief,” Solly said.

He said a number of businesses that may need to raise capital also found support from investors buying in an anticipation of an offer.

Tourism Holdings has also been on a winning streak this week, up 25 per cent since Monday after rising 6 per cent to $1.60 on the day. Investors have been encouraged by lockdown restrictions easing around the world and the prospect of transtasman travel resuming.

Casino operator SkyCity Entertainment Group rose 2.1 per cent to $2.49, again on the prospect of the leisure economy kicking back to life.

Companies offering reliable dividends are also back in demand as interest rates are expected to stay low for the foreseeable future. While the Reserve Bank has said it won’t move the official cash rate from its 0.25 per cent level for the next year, some economists predict the rate may move into negative territory.

“People are thinking about how to invest in that environment, with income yield-type stocks having a bounce,” Solly said.

Spark New Zealand rose 2.5 per cent to $4.60, Mercury NZ increased 3.5 per cent to $4.80 and Meridian Energy rose 2.2 per cent to $4.70.

Property for Industry said yesterday its balance sheet and cashflow are in a strong enough position for it to continue paying dividends. Still, it warned it was still unable to assess the impact Covid-19 would have on earnings, with some tenants needing rent relief. The shares fell 2.2 per cent to $2.21.