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MARKET CLOSE: NZ shares extend gain on low-rate tailwind; Vista at record

Thursday 9th May 2019

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New Zealand shares rose for a third day as the Reserve Bank's rate cut provides another tailwind to the stock market. Vista Group International hit a record. 

The S&P/NZX 50 Index rose 41.3 points, or 0.4 percent, to 10,104.35. Within the index, 24 stocks gained, 15 fell and 11 were unchanged. Turnover was $202.8 million. 

The local market outperformed the rest of the Asia-Pacific region, with Australia's S&P/ASX 200 Index and Thailand's SET Index the only other bourses in positive territory today. The central bank's cut to the official cash rate yesterday spurred investors to buy stocks, where they can achieve higher returns than fixed income assets. 

"Yesterday we saw an intra-day swing in the market after a poor start and that's continued into today," said Grant Davies, an investment advisor at Hamilton Hindin Greene. 

"We've got funds falling off the bond maturities coming up, KiwiSaver balances that keep going up, so the rate cut is just another tailwind out there for the market."

The rate cut pushed the kiwi dollar below 66 US cents for the first time since October, boosting the value of local firms' export receipts. 

Vista, which derives most of its revenue overseas, led the market higher, up 5.2 percent at $5.50 on a volume of 2.4 million shares, more than eight-times its 90-day average.

Pushpay Holdings was the most traded stock on a volume of 5.7 million shares, more than 10 times its 398,000 average. The shares rose 1.6 percent to $3.77, recovering some of yesterday's decline when it reported an annual profit and said its founder Chris Heaslip was stepping down as chief executive. 

Auckland International Airport rose 3.1 percent to $8.25 on a volume of 4.3 million shares, almost four-times normal. Fisher & Paykel Healthcare increased 2.4 percent to $15.99 on 1.1 million shares, almost twice its usual volume, and Tourism Holdings advanced 2.3 percent to $4.04 on a smaller volume than usual of 93,000. 

Spark rose 0.6 percent to $3.645 on a volume of 4.7 million shares, while Kiwi Property Group was unchanged at $1.535 on a volume of 2.9 million shares. Meridian Energy increased 0.8 percent to $4.28 on a volume of 2.3 million shares. 

Of other companies trading on volumes of more than a million shares, Contact Energy rose 1.3 percent to $7.23, Mercury NZ increased 0.3 percent to $3.94, and Goodman Property Trust decreased 0.3 percent to $1.73. 

Fletcher Building posted the biggest decline, down 4 percent at $5.06 on a volume of 1.1 million shares, in line with its 90-day average. A2 Milk Co slipped 1.5 percent to $16.07 with 475,000 shares changing hands, less than its 801,000 average. 

Outside the benchmark index, PGG Wrightson fell 3.6 percent to 54 cents after announcing plans to return $235 million, or 31 cents per share, to investors in a buyback after selling its seeds division. Chief executive Ian Glasson announced his departure at the end of the month, and the company warned annual earnings from the remaining businesses will be at the lower end of guidance. 

Davies said the profit warning weighed on the stock, and investors will be interested to see how the slimmed down business operates. 

Tilt Renewables, which is controlled by Infratil and Mercury, declined 0.4 percent to $2.35 after annual profit was in line with expectations. The board decided to retain earnings for future projects rather than pay a dividend this half. 

Infratil rose 1.1 percent to $4.60. 

Chorus's 2028 bonds paying 4.35 percent annual interest were the most traded debt security with 1.9 million notes changing hands. The yield was down 1 basis point at 3.54 percent. Chorus shares rose 1.5 percent to $6.23. 

Meridian's 2023 bonds paying 4.53 percent, traded at a yield of 2.68 percent, down 9 basis points on a volume of 1.1 million notes. That's the lowest yield since it listed in March 2016. 


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