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MARKET CLOSE: NZ shares rise as speculation on interest rate cuts fuels global equities buying

Friday 1st July 2016

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New Zealand shares rose along with global markets as speculation about interest rate cuts stoked demand for equities, with Kathmandu Holdings, Property for Industry and Auckland International Airport gaining. 

The S&P NZX 50 Index gained 28.7 points, or 0.4 percent, to 6,926.23. Within the index, 23 stocks rose, 23 fell and four were unchanged. Turnover was $163.8 million

The index has gained 3.9 percent this week, rising every day after being sold off heavily last Friday following the UK's vote to leave the European Union. Markets across the globe strengthened overnight and Asia traded higher this afternoon. Hong Kong's Hang Seng rose 1.8 percent, Japan's Nikkei 225 gained 0.5 percent, and Australia's S&P/ASX 200 increased 0.2 percent ahead of the country's national election tomorrow.

"It's been another very good day on the back of offshore markets again firming up, concerns over the British exit don't seem to exist right at the moment - or maybe it's more a reaction to interest rates around the world are going to go lower, and that's good for equities," said Grant Williamson, director at Hamilton Hindin Greene. "There hasn't been much in the way of stock specific news, the spotlight will be on Australia this weekend - dare I say the decision looks like an easy one this time, although I think we all thought that last week with the British vote."

Kathmandu was the best performer today, up 3.9 percent to $1.59. It advanced 15 percent yesterday after raising its forecast for annual earnings as the outdoor equipment chain boosts margins from new products, better management of promotional activity and cost savings.

Williamson said some analysts were upgrading their expectations for the stock. 

Property for Industry gained 3.2 percent to $1.62, Auckland Airport rose 2.3 percent to $6.65, and Summerset Group advanced 2.3 percent to $4.48.

Warehouse Group gained 1.8 percent to $2.82. Professional director Joan Withers will take over as chair of Warehouse in September, having decided she won't seek reappointment to her role as chair of Television New Zealand when her term ends early next year.

Xero was the worst performer, down 1.9 percent to $17.85. 

Vital Healthcare Property Trust dropped 1.8 percent to $2.19, Ebos Group fell 1.6 percent to $16.10 and Trade Me Group declined 1.3 percent to $4.57. 

Restaurant Brands New Zealand dipped 0.4 percent. The board of the fast-food operator has asked shareholders to approve an 18 percent boost to its pool for directors' fees which it says will help attract and retain high calibre talent needed to run a more complicated business after its recent Australian expansion.

Outside the main index, Augusta Capital was unchanged at $1.10. The listed property investor and fund manager will lift its dividend payments by 10 percent in the 2017 year saying the increase reflected the growth of its funds management business.

The benchmark index will see a new constituent next week, with Stride Property's wholly-owned subsidiary, Investore Property, joining the S&P/NZX 50 Index next Wednesday until at least September after it is spun off from Stride. 

Investore will list on the NZX 50 index and other S&P indices after the close of trade on July 6. It will be a member of the benchmark index and the other indices at least until the next rebalance in September when it will be reviewed for ongoing membership, said Douglas Beem, associate director of S&P Global.

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