Good deal?
But Stock Takes can't help wondering what the attraction is for investors to lock their money into an investment for five-plus years when rates are due to rise?
Mark Brown, director of fixed income at Harbour Asset Management, says while short-term rates are likely to go up in light of next month's expected official cash rate rise, long-term rates have already increased.
Back in 2005 you could get 8 per cent per annum for a bond but that fell to as low as 3.2 per cent in 2012.
It has since bounced back to 4.8 per cent. "That's the highest we've been at for three years." Brown says.
For many investors who are comparing the rates to bank term deposits or short-term rates, the long-term bond offers can look attractive.
The Contact Energy bond is expected to be priced at 5.8 per cent to 6 per cent per annum while Brown expects Sky TV's to be set at a little over 6 per cent.
A five-year term deposit at the bank is paying about 5.5 per cent at the moment. "It's a bit of a judgment call as to how far and how fast you think rates will rise," says Brown.
He likens it to those trying to make a call on whether to fix their mortgage interest rates at the moment.
While the fixed rates are higher than the floating rates, they could be comparatively cheap compared to where the rates might head in a year. Details of Sky TV's offer are due within two weeks.
Tough trading
Online auction site Trade Me seems to be the most disappointing result of the season so far - although we are only at the halfway stage.
Trade Me shares touched a 19-month low of $3.68 on Wednesday after it released a result that didn't meet market expectations.
Its net profit rose 2 per cent to $38 million, but growth was slower than the previous year and costs were up sharply. But not all are giving up hope on the company.
Morningstar released a note yesterday with an accumulate recommendation saying while the result was underwhelming, the outlook for the company was still promising.
"In light of the first-half performance and expectation of subdued earnings before interest and tax and net profit after tax, we reduce our fiscal 2014 and 2015 earnings by 9 per cent and 4 per cent respectively.
"However our long-term projections remain largely intact as we see margins recovering in the ensuing years as the pace of cost increases abates.
"Top-line growth of 10 per cent to 11 per cent on average during the next five years will still be aided by classifieds and other businesses."
Morningstar believes Trade Me is undervalued because the market is taking a short-term view on earnings growth and has kept its fair value at $4.40. The stock closed up 19c at $4.02 yesterday.
Backing the bikinis
Air New Zealand's latest advertising antics have raised the ire of many women but its results are expected to be a standout performer of this reporting season. Forsyth Barr has raised its rating on the national carrier from neutral to outperform before Thursday's half-year announcement.
Analyst Andy Bowley said in his note while he recognised the high-risk nature of airline stocks he believed Air New Zealand was well positioned to retain its positive earnings growth trajectory.
"Favourable tail winds from the improving trading backdrop, incremental lower cost capacity, the company's long-haul strategy and stable to falling fuel costs are supportive."
Bowley predicts net profits for the half to be $125 million, 26 per cent up on the same period last year, and for its interim dividend to rise from 2c to 3c.
He also increased his 12-month target price from $1.85 per share to $2.25. Air NZ shares closed on $1.705 yesterday.
TOP 10 Accounting software firm Xero is to join the top 10 listed companies on the NZX from Monday, knocking Infratil out of the NZX10 index.
The move up the ranks has taken a long time given Xero's strong share price growth. One analyst didn't expect any major impacts from the index inclusion.
The sharemarket darling announced it had hit more than 250,000 customers yesterday but failed to impress punters. Shares dipped 40c on the news, hitting $39.20 but recovered later in the day to close on $39.98.
CEO Rod Drury said it had taken the firm five years to get to 50,000 and it had managed to add 115,000 in the last year alone.
Tight competition
Two boutiques and a bank are in the running for Morningstar's top gong in its annual awards.
ANZ Investments, Milford Asset Management and Harbour Asset Management are finalists for the New Zealand fund manager of the year.
Milford won the award last year and OnePath, which is owned by ANZ, won in 2012. ANZ and Milford are also finalists with Fisher Funds in the KiwiSaver category. The winners will be announced on Wednesday.
