New Zealand shares rose, pushing the NZX 50 Index to a new record, as a lack of negative surprises during earnings season ensured ongoing demand for the market's relatively high yields. Genesis Energy, Metro Performance Glass and A2 Milk gained.
The S&P/NZX 50 Index gained 56.90 points, or 0.8 per cent, to 7462.16. Within the index, 28 stocks rose, 15 fell and eight were unchanged. Turnover was $161 million.
The benchmark index has climbed 209 per cent from its lows of early 2009 in the depths of the global financial crisis (GFC).
The GFC spurred concerted efforts by central banks to revive economic growth through extraordinary levels of stimulus, including quantitative easing and in the case of Europe and Japan, negative interest rates. In the face of record low interest rates, equity markets shone. On Wall Street, the Standard & Poor's 500 has also recovered from its 2009 lows to reach record highs.
"The path of least resistance has been up," said Greg Smith, head of research at Fat Prophets. "If you look at the lower-for-longer interest rate environment, equities are going to continue to win the beauty prize."
New Zealand has had "a reasonable earnings season" and has an economy that's performing "quite resiliently", especially given the impact of a weak dairy sector and a high Kiwi dollar, he said.
Genesis Energy rose 3.9 per cent to $2.25, leading the index higher. The company reports Wednesday and is expected to post a normalised full-year profit of $83.7 million from $81.8m a year earlier, according to brokerage Forsyth Barr. Meridian Energy, which rose 1 per cent to $2.93, also reports Wednesday and is forecast to post a 12 per cent gain in profit to $233.5m on strong inflows into hydro lakes.
Among other utilities, Mercury NZ gained 1.3 per cent to $3.04 ahead of its results tomorrow, and Vector rose 1.2 per cent to $3.53 before its results Wednesday.
MetroGlass, which is on a March 31 financial year, rose 3.5 per cent to $2.08. Ryman Healthcare gained 2.8 per cent to $9.66 and Metlifecare, which reports Wednesday, gained 1.7 per cent to $6.04.
A2 Milk rose 2.8 per cent to $2.24. In June the milk marketing company raised its guidance for full-year sales and earnings, with operating earnings before interest, tax, depreciation and amortisation projected to be $52m to $54m.
"It's one of the stocks that opinion has been quite divided on, but it is back to its former highs," Smith said.
Spark New Zealand rose 2.6 per cent to $4, a 10-year high. Last week the company reported a 1.3 per cent drop in annual profit but announced a special dividend on top of its regular payment and promised a further special dividend in 2017. "Spark has strong yield appeal," Smith said.
Sky Network Television, which reports on Friday, was the biggest decliner yesterday, dropping 2.3 per cent to $4.77. The pay-TV company gave guidance at the time it announced its merger proposal with Vodafone New Zealand in June and is expected to report profit before one-time items of about $150m, down 13 per cent from a year earlier.