Sharechat Logo

MARKET CLOSE: NZX 50 hits record on outlook for low interest rates; Pushpay, Scales gain

Thursday 10th May 2018

Text too small?

New Zealand shares rose to a record high, led by Pushpay Holdings and Scales Corp, after the Reserve Bank affirmed plans to keep interest rates low. Mercury New Zealand and Fletcher Building weakened.

 

The S&P/NZX 50 Index rose 17.89 points, or 0.2 percent, to 8,637.72. Within the index, 29 stocks rose, 12 fell and nine were unchanged. Turnover was $130.5 million. 

 

This morning, new Reserve Bank governor Adrian Orr kept the official cash rate at 1.75 percent and said he expects to keep the OCR at "this expansionary level for a considerable period of time", and that the direction of the next move is equally balanced and could be up or down, although its forecasts continue to point to eventual rate increases. The New Zealand dollar fell.

 

"The market is not showing a huge amount of signs of life, although the Reserve Bank statement that interest rates aren't moving soon does make equities a good place to achieve superior income compared to term deposits," said Grant Williamson, director at Hamilton Hindin Greene. "It has got some interest back into the market, particularly in higher yield stocks like Spark. Offshore markets are very firm too, which certainly helps." 

 

Spark gained 1.6 percent to $3.545, while dual-listed Australian bank stocks rallied, with Westpac Banking Corp up 2.2 percent to $32.43 and Australia and New Zealand Banking Group rising 1.9 percent to $30.25.

 

Pushpay Holdings led the index higher, up 4.9 percent to $4.28. The company is due to report its annual results next Thursday.

 

"Nothing has been announced for a number of weeks so that doesn't explain the price rise today, and following their last quarterly announcement the share price actually softened somewhat," Williamson said.

 

Scales rose 1.9 percent to $4.85. It will sell its cold storage businesses to newly-incorporated US cold storage chain company Emergent Cold for $151 million as it shifts to a greater focus on agribusiness. The deal is subject to approval by the Overseas Investment Office.

 

"They touched $5 but have drifted off a little bit. They're wanting to focus more on a pure agri play which makes sense, although with that comes a bit of risk with the storms in the North Island possibly damaging crops. The market has taken that very nicely," Williamson said. 

 

Mercury was the worst performer, down 1.5 percent to $3.19, with Kathmandu Holdings falling 1.5 percent to $2.61 and Meridian Energy falling 1.3 percent to $2.945. 

 

Fletcher Building dropped 0.8 percent to $6.40. The stock had been gaining over the past month, recovering from the six-year low it hit at the beginning of April, after last month completing the institutional component of a $750 million capital raise, generating gross proceeds of $515 million. The retail component of Fletcher's capital raise opened on April 23 and closes tomorrow.

 

(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:

MARKET CLOSE: NZ shares fall as investor uncertainty weighs on exporters; F&P Health, A2 drop
NZ dollar drops below US68c on plan to up bank capital
Noel Leeming fined $200,000 for misleading consumers
Big four banks face stiffer capital requirements from RBNZ
Infratil signals A$50m investment in Canberra Data Centres
Govt provides $2.5 mln to develop Opotiki aquaculture
Labour co-ordinator role may alleviate kiwifruit labour shortage
NZ manufacturing activity chugs along in November
Australia's GWA lobs in $118M bid for Methven
Govt leaves door open for higher emissions price cap

IRG See IRG research reports