NEW Zealand shares rose yesterday as markets across Asia rallied on speculation the US Federal Reserve Bank will keep interest rates on hold next year, which would maintain the yield attraction of stocks over bonds. Spark New Zealand was up in heavy trading.
The S&P/NZX 50 index increased 9.1 points, or 0.1%, to 8767.32. Within the index, 21 stocks rose, 24 fell and five were unchanged. Turnover was $129.3 million, of which Spark contributed $28.1 million.
Stocks across Asia were modestly higher in afternoon trading, with Australia’s S&P/ASX 200 up 0.4%, Hong Kong’s Hang Seng gaining 0.2% and Japan’s Topix rising 0.5%. A report by the Wall
Street Journal that the Fed will hike rates this month and then adopt a more cautious approach was welcomed by investors, who saw it as a sign that the interest rate track will be flatter than current expectations. Rising interest rates reduce demand for stocks as investors can lock in a higher return from interestbearing investments.
Peter McIntyre, an investment adviser at Craigs Investment Partners, said flat interest rates next year should support global growth, which would make it easier for firms to maintain or increase earnings.
Spark rose 0.4% to $4.20 on more than twice its average volume at 6.7 million shares traded. Mr McIntyre said Spark was wellliked by international investors because of its attractive dividend yield — almost 6.8% — and liquidity.
Among other stocks held for their dividend, Argosy Property rose 0.9% to $1.16 and Investore Property increased 0.7% to $1.52, both on light volumes.
Chorus was 0.4% higher at $4.77 on very light volumes. The telecommunications network operator’s $500 million of 10year bonds started trading yesterday. About 1.7 million traded on the first day at a yield of 4.15%.
Z Energy led the market higher, up 2.5% at $5.70 on slightly smaller volumes than average. The transport fuels company welcomed a Government inquiry into the failure of the fuel pipeline from the refinery to Auckland last year, reiterating its concerns about the lack of resilience in Auckland’s supply chain. New Zealand Refining fell 0.9% to $2.26.
Meridian Energy fell 1.2% to $3.26, Contact Energy slipped 0.7% to $5.72, and Fletcher Building was down 0.4% at $4.72, all on larger volumes than normal.
Fisher & Paykel Healthcare fell 9cs to $12.38 after shedding rights to a 9.75cpershare interim dividend.
A2 Milk rose 2.4% to $11.02 on modest volumes, while Synlait Milk decreased 0.6% to $9.35.
Gentrack was the worst performer, down 2.87% at $5.30, and Sky Network Television declined 2.6% to $2.27, both on smaller volumes than usual.
Outside the benchmark index, Hallenstein Glasson dropped 35 cents to $4.85 after shedding rights to a 24 cents per share dividend. Green Cross Health will shed rights to a 3.5 cents per share dividend on Monday, and was down 8 cents at $1.20 yesterday.
The Australian sharemarket has held on to its broadbased gain yesterday, with banking and energy stocks buoyant at noon.
The benchmark S&P/ASX200 index climbed 39.7 points, or 0.7%, to 5697.4 at 1200 AEDT yesterday, while the broader All Ordinaries rose 0.6%.
US economic concerns, as well as the tentative trade stalemate between the country and China, were expected to weigh on the local market at the open but the financial and healthcare sectors climbed into noon.
Commonwealth Bank had the strongest rise of the big four lenders, up 1.2% at $A70.49 ($NZ74), and ANZ the least, rising 0.7% to $A25.86. Macquarie Group climbed 2% to $A114.30. Beleaguered wealth manager IOOF Holdings was a rare spot of red on the benchmark, dropping more than 30% to $A4.84 after the prudential regulator moved to disqualify its top brass and impose new license conditions after allegations of wrongdoing.
Biotech giant CSL extended earlier gains, rising 2.8% to $A184.22, with the healthcare sector also supported by ResMed and Cochlear.
Materials was the only sector to lose ground during the morning’s trade, dragged down by South32, which fell nearly 1% to $A3.09, and Fortescue, down 0.5% at $A4.03.
Giants BHP and Rio Tinto were down 0.2% and 0.1% respectively, while BlueScope bucked the sector’s trend and was 1.1% higher at $A11.99.
Adelaide Brighton was down more than 9% at $A4.84 after downgrading its profit forecast.
The Aussie dollar rose, buying US72.31c from US72.22c on Thursday. — BusinessDesk/AAP