Sharechat Logo

MARKET CLOSE: NZ shares gain as investors eye rate cut change; Sky TV, Port of Tauranga gain

Tuesday 4th September 2018

Text too small?

New Zealand shares rose as investors weigh up the prospect of a potential rate cut, spurring demand for stocks with high dividends, in a world economy that remains relatively robust. Sky Network Television, Spark New Zealand and Chorus gained. 

The S&P/NZX 50 index gained 34.86 points, or 0.4 percent, to 9,292.15. Within the index, 32 stocks gained, 14 fell and four were unchanged. Turnover was $124.4 million. 

Traders are pricing in a 50 percent chance New Zealand's Reserve Bank will cut the official cash rate in an effort to lift inflation. Low interest rates have been a long-standing support for the domestic market, where investors can find relatively stable returns from the likes of utilities and property investment firms. Earnings season affirmed the relatively benign outlook for local companies, while the global economy remains well supported by rapid growth in the US, notwithstanding geopolitical ructions. 

"We've got potential for a rate cut" with the global economy in "pretty reasonable shape" which is "buoying the market," said Grant Davies, an investment adviser at Hamilton Hindin Greene in Christchurch."We find ourselves in this situation where people are expecting the worst is about to happen because it's been so long since things have gone wrong."

Sky TV led the market higher, rising 3.6 percent to $2.28, as it bounced back for a second day after a 19 percent decline through the tail-end of August. 

Spark rose 1.8 percent to $4.01 after Vodafone New Zealand reported a decline in annual earnings as its margins were squeezed by an increasingly competitive broadband market. Network operator Chorus, which counts both Spark and Vodafone as major customers, rose 1.6 percent to $4.72. 

Mercury NZ rose 1.5 percent after its joint venture with Infratil was granted approval by Australia's Foreign Investment Review Board to buy Tilt Renewables. Infratil increased 0.3 percent to $3.425. Tilt's independent directors urged investors to reject the $2.30 takeover, saying the price was too low. Tilt shares increased 0.9 percent to $2.30. 

Davies said Infratil and Mercury already own about 77 percent so don't need much to trigger compulsory acquisition under the Takeovers Code. 

Contact Energy rose 0.5 percent to $5.58 after appointing Westfield Milk Products' Dorian Devers as its new chief financial officer. 

Kathmandu Holdings fell 1.5 percent to $3.20, the biggest fall on the day. The retailer is scheduled to report annual earnings on Sept. 18. 

Westpac Banking Group fell 0.9 percent to $30.82 after saying it reached a A$35 million deal with the Australian Securities and Investments Commission, settling potential litigation over automatically approving 10,500 loans between 2011 and 2015 that should have been referred to a credit officer. Australia & New Zealand Banking Group declined 1.3 percent to $31.38. 

Outside the benchmark index, Methven gained 6.3 percent to $$1.18. The tapware maker attracted a new investor who paid $1.20 a share for a 6.4 percent stake. 

Pyne Gould Corp fell 1.5 percent to 34 cents after appointing Grant Thornton Guernsey as its new auditor to meet Guernsey law. Grant Thornton NZ will provide a separate audit to ensure the firm meets New Zealand laws and NZX listing rules. 

(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:

Take care to avoid "unnecessary" cost in electrifying economy - Vivid
Is this the calm before a storm of credit card thrashing?
Shrinking meat and dairy product manufacturing weighs on growth outlook
Jon Macdonald to stay on as Trade Me boss through takeover tussle
Shareholders’ Association wants Finzsoft to come clean
A2 rings in more executive changes under new CEO Hrdlicka
NZ dollar dips as China-US trade tensions cast pall over global markets
No end in sight to global market turmoil
MARKET CLOSE: NZ shares rally on speculation of flat US rate track; Spark gains
Fed's wait-and-see signal keeps NZ dollar steady for the week

IRG See IRG research reports