MARKET CLOSE: NZ shares mixed; Kathmandu drops, Spark, Genesis gain

Thursday 10th September 2015

New Zealand shares were mixed, as the Reserve Bank's cut to interest rates supported yield-bearing stocks amid further global market volatility. Kathmandu Holdings dropped, as Spark New Zealand and Genesis Energy gained

The S&P/NZX 50 Index fell 0.44 points, or 0.01 percent, to 5670.98. Within the index, 18 stocks rose, 24 fell and eight were unchanged. Turnover was $191 million.

New Zealand's benchmark index held up despite offshore pressure, with Japan's Nikkei 225 Index down 3.5 percent, following yesterday's more than 7 percent spike, and Australia's S&P/ASX 200 Index declining 2.3 percent. Offshore volatility made some investors nervous and kept them out of the market, Grant Williamson, director at Hamilton Hindin Greene said.

"Investors are still a little bit nervous. What's happening overseas, with very large swings, does cause investors concern and they prefer to sit on the sidelines in times like this," Williamson said.

Kathamndu Holdings, the outdoor goods retailer, led the benchmark index lower, down 3.2 percent to $1.51. MightyRiverPower, the energy generator and retailer, fell 3 percent to $2.65. SkyCity Entertainment Group, the casino operator, declined 2.1 percent to $3.81. Westpac Banking Corp, the dual-listed Australian bank, slipped 1.6 percent to $34.37.

RBNZ governor Graeme Wheeler cut the official cash rate by a quarter point to 2.75 percent, as was widely expected. The central bank signalled the possibility of even lower rates, which underpinned the local bourse despite offshore volatility, including concerns in recent weeks that China's economic growth is cooling, and weakness overnight on Wall Street.

Telecommunications provider Spark rose 0.3 percent to $3.37. Genesis, the government-controlled energy utility, gained 0.8 percent to $1.85. Chorus, the telecoms network provider, advanced 2.3 percent to $2.68. Goodman Property Trust increased 0.4 percent to $1.18. Contact Energy climbed 0.4 percent to $5.11.

"The Reserve Bank move to cut rates has supported our sharemarket," Williamson said. "Investors are looking for higher yields than what they're going to be getting in the banks and certainly underpinned our market."

Air New Zealand, the national carrier, fell 2.5 percent to $2.35.

Pacific Edge, the biotech firm, was the best performer on the day, jumping 6.3 percent to 51 cents.

On the New Zealand Alternative Index, Pulse Electricity surged 33 percent to 8 cents after it came out of a trading halt. Lines company Buller Electricity may make a full cash takeover for the 44 percent of the small-scale electricity retailer that it doesn't already own, in partnership with an undisclosed third party.

BusinessDesk.co.nz

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