New Zealand shares rose to a record led by Freightways after a profit upgrade. Mainfreight and Restaurant Brands paced gains as investors hunted for yield investments after the Reserve Bank kept interest rates on hold.
The NZX 50 Index rose 14.305 points, or 0.3 percent, to 5370.18, marking the sixth record close in a row. Within the index, 23 stocks rose, 14 fell and 13 were unchanged. Turnover was $94.3 million.
Freightways climbed 6.8 percent to a record $5.50 after the listed courier and data management company affirmed it is on track to lift 2015 earnings. It recorded the strongest first-quarter performance in a decade, widening its profit margin on a 17 percent increase in sales, while profit rose 37 percent to $13.4 million in the three months ended Sept. 30.
"Another positive day on the local market, fuelled a little bit by a profit upgrade from Freightways," Grant Williamson, director at Hamilton Hindin Greene said. "A courier business can normally be a pretty good barometer for the general economy, so there is a little bit of confidence in that upgrade from Freightways."
Central bank governor Graeme Wheeler kept the official cash rate on hold at 3.5 percent this morning and flagged rates may stay lower for longer as he pauses to asses the impact of his 100 basis point hike between March and September. Investors bought stocks on the anticipation they will provide a better return than other yeilding assets.
Courier and air services company Mainfreight rose 3.5 percent to $15.90. Restaurant
Brands New Zealand, the fast food chain operator and franchiser, climbed 1.9 percent to $3.70.
"Investors are probably now realising that interest rates are going to remain lower for longer and they certainly want better than they can get in the interest rate market," Williamson said. "Today's Reserve Bank announcement reinforces that outlook."
A2 Milk advanced 5.2 percent to 61 cents. The milk marketer has fallen some 37 percent from its February high of 97 cents. Kathmandu Holdings, the outdoor goods retailer which has fallen 13 percent in the past six months, rose 1.3 percent to $3.13. Summerset Group Holdings, the retirement village operator which has fallen 21 percent over the past six months, gained 1.1 percent to $2.75.
"Investors are hunting through the market looking for some oversold opportunities," Williamson said.
Vector, the Auckland lines company, gained 1.9 percent to $2.70. The Commerce Commission reduced the rate of return regulated power and gas network monopolies, like Vector, can make.
Fletcher Building, New Zealand's largest listed company, gained 0.4 percent to $8.48. Spark New Zealand, formerly Telecom Corp, was unchanged at $3.115.
On the New Zealand Alternative Index, Chatham Rock Phosphate, which is seeking to mine phosphate nodules from the seabed on the Chatham Rise, tumbled 13 percent to 13.5 cents after it said it will push out the date to exercise its listed options until 12 months after it receives marine consent to allow it share price to stabilise.