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MARKET CLOSE: NZ shares edge higher; US rate uncertainty buoys local blue chips

Monday 17th June 2019

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New Zealand shares rose with blue-chips including Auckland International Airport and Ebos Group hitting new highs as investors remain uncertain about whether US and Australian central banks will cut interest rates. Summerset group fell in unusually busy trading. 

The S&P/NZX Index increased 11.56 points, or 0.1 percent, to 10,235.37. Within the index, 20 stocks rose, 22 fell, and eight were unchanged. Turnover was $174.7 million, of which Summerset accounted for $54 million. 

Equity markets were mixed across Asia, as investors remained uncertain about the impact of the persistent trade dispute between the US and China, while at the same time weighing up the impact of expected interest rate cuts in the US and Australia. 

"The focus is what's happening offshore, particularly in the US," said Craigs Investment Partners investment advisor Peter McIntyre. 

The low interest rate environment has been a boon for local blue-chip stocks, utilities, and property firms due to the reliable dividends New Zealand firms often pay investors. Auckland International Airport rose 0.2 percent to a record $9.02. Goodman Property Trust rose 1.3 percent to $1.885 on a volume of 1.73 million units, Ryman Healthcare increased 1.2 percent to $11.65, and Genesis Energy increased 1.1 percent to $3.17.

Ebos Group hit a record $23.50, closing at $23, down 0.8 percent and Mainfreight hit a record $42.50, closing at $39.71, down 0.2 percent.

Pushpay Holdings led the market higher, up 2.1 percent at $3.90 on 436,200 shares. 

Summerset fell 1.3 percent to $5.52 on a volume of almost 10.2 million shares, the bulk of which was in a single trade. 

"That's big for Summerset," McIntyre said. "There are some institutional investors in there buying and selling the stock with that kind of volume." 

That weighed on other retirement village stocks, which have fallen out of favour among investors who often tie the companies' fortunes with the residential property market. Oceania Healthcare fell 1 percent to $1.04, Metlifecare declined 0.7 percent to $4.34, and Arvida Group was down 0.8 percent at $1.32. 

McIntyre said he wasn't convinced the slowing Auckland housing market will weigh as heavily on the sector.

"When someone's got to go to a retirement village, they're going to go to a retirement village."

Kathmandu Holdings posted the biggest decline, down 4.1 percent at $2.09 on almost 115,000 shares. The retailer has declined 5 percent this week, having shed rights to its 4 cent dividend on June 4. 

Contact Energy increased 0.5 percent to $7.59 after announcing a new gas deal with OMV, which it said will secure its supply through winter. 

Spark New Zealand was unchanged at $3.875 on 4.7 million shares, down on its 90-day average of 5.4 million. Of other stocks trading on volumes of more than a million shares, Kiwi Property Group fell 0.3 percent to $1.57, Fletcher Building rose 0.6 percent to $5.43, Meridian Energy was up 0.1 percent at $4.485, Precinct Properties New Zealand advanced 0.6 percent to $1.685 and Z Energy increased 0.2 percent to $6.05. 

Chorus declined 1.7 percent to $5.86 after government figures showed ultrafast broadband uptake hit 51.7 percent across the country in the March quarter, with Nelson, Hamilton and Tauranga among the highest penetration rates. 

Infratil rose 0.9 percent to $4.425 after completing the retail component of its $400 million capital raising to help fund its share of its planned $3.4 billion Vodafone New Zealand acquisition with Brookfield Asset Management. 

New Zealand Refining's 2034 notes paying annual interest of 5.1 percent were the most traded debt security on a volume of 303,000. They closed at a yield of 4.05 percent, down 5 basis points. Refining NZ shares rose 1 percent to $2.10. 


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