Sharechat Logo

MARKET CLOSE: NZ shares buoyed by prospect of low rates; Spark gains

Tuesday 24th September 2019

Text too small?

(Sept. 23, 5:50 PM) 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 headlines to end the day stronger. 

The S&P/NZX 50 Index advanced 43.94 points, or 0.4 percent, 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 New Zealand 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 negotiations triggered fears over global growth to re-emerge. New Zealand and Australian central banks are expected to continue cutting their benchmark interest rates, which has been a boon for equity markets in providing cheap finance to corporates and also increasing the relative returns from stocks. 

"If things are going well and they cut rates, that can be good for equity markets," said Grant Davies, an investment advisor at 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 percent 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 tea-cup 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 percent 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 price action for the two stocks, which was within trading norms. 

Auckland International Airport led the market higher, up 2 percent at $9.31, with 351,000 shares changing hands, about a third of its 1.1 million average. 

Mainfreight rose 1.8 percent to $39.70 and Z Energy was up 1.4 percent at $5.63. 

A2 Milk Co rose 1.3 percent to $13.70 after appointing Qantas executive Race Strauss as its next chief financial officer. A2 Milk chief Jayne Hrdlicka is also a former Qantas executive. 

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

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

Vector was down 1.4 percent 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. 

Outside the benchmark index, Eroad was up 1.7 percent at $2.95 after telling investors it expects to start pursuing acquisitions over the next couple of years. It expects positive earnings from Australia in the next three or four years. 

Turners Automotive fell 0.4 percent to $2.57 after saying first-quarter trading was robust and ahead of budget. The company's board declared a first-quarter dividend of 4 cents per share. 

Moa Group was unchanged at 33 cents after saying first-half revenue and earnings were in line with expectations. It will hold its annual meeting tomorrow. 

(BusinessDesk)



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report