New Zealand shares rose for a second day, led by Kathmandu Holdings after the outdoor equipment chain beat earnings expectations and as record-low interest rates continue to support yield stocks.

The S&P/NZX 50 Index increased 88.04 points, or 0.8 per cent, to 10,874.30. Within the index, 34 stocks rose, 12 fell, and four were unchanged. Turnover was $165.3 million.

Kathmandu hit a four-month high $2.45, and ended the day up 16 per cent at $2.44 on a volume of 850,000 shares, well up on its 90-day average of 143,000. The retailer said annual profit rose by as much as 13 per cent as Australian sales accelerated in the second half and its North American Oboz Footwear acquisition continued to bolster revenue. It will report its audited result in September.

"Kathmandu was the star on the day," said Shane Solly, a portfolio manager at Harbour Asset Management which owns about 11 per cent of the retailer. "They came out with an absolute ripper of a result."

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Yesterday's surprisingly large cut to the official cash rate by the Reserve Bank continued to support demand for stocks offering reliable dividends. Argosy Property, which held its annual meeting today, rose 4.6 per cent to $1.475, Auckland International Airport was up 3.3 per cent to $9.81 on a volume of 1.3 million shares, Contact Energy advanced 2.7 per cent to $8.13 with 1.2 million shares changing hands, Stride Property increased 2.6 per cent to $2.34, and Genesis Energy was up 2.6 per cent at $3.51.

Solly said interest rates are at generational lows with the 10-year government bond yield at 1.13 per cent and people are resetting their thinking.

"Undoubtedly we will continue to see capital flowing into our higher, sustainable yielding securities," he said.

Napier Port was priced at the top of its indicative range in a bookbuild at $2.60 a share. It is set to list on the NZX on August 20. NZX was unchanged at $1.19.

Solly said the port operator is the right business at the right time given the demand for infrastructure companies, although he noted the recent volatility in log prices mean Napier Port will still need to deliver on its plan.

The sharp interest rate cut also helped push the kiwi dollar lower - ending the local session at 64.56 US cents - which Solly said also supported exporters. Pushpay Holdings rose 1.3 per cent to $3.25, Air New Zealand advanced 0.9 per cent to $2.76, Scales Corp was up 0.9 per cent at $4.58 and Fisher & Paykel Healthcare increased 0.3 per cent to $16.05.

A2 Milk Co fell 2.7 per cent to $16.13 on a volume of 1.3 million shares, more than its 710,000 average, and the worst performer on the benchmark index. Tourism Holdings was down 2.2 per cent at $3.95.

Spark New Zealand was the most traded stock on a volume of 8.9 million shares, more than twice its 90-day average of 3 million and the biggest volume since early April. It rose 0.5 per cent to $4.14. Meridian Energy was up 0.8 per cent at $4.88 on a volume of 1.7 million.

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Of other stocks trading on volumes of more than a million shares, Kiwi Property Group rose 1.5 per cent to $1.655, Fletcher Building decreased 0.2 per cent to $4.73, and Chorus increased 1.6 per cent to $5.71.

Vital Healthcare Property Trust increased 0.6 per cent to $2.62 after reporting a 6.6 per cent decline in annual profit, due to higher management fees and finance costs. That was despite a 7.7 per cent increase in net rental income.

Infratil rose 2.1 per cent to $4.85 after selling its 80 per cent stake in Perth Energy to Australia's AGL Energy for A$55m ($57.6m) upfront and a potential earn-out of A$14.9m. The infrastructure investor said it might post a $33m loss on the sale.

Mercury NZ's 2049 capital bond paying annual interest of 3.6 per cent was the most traded debt security for a second day on a volume of 464,000. It closed at a yield of 2.65 per cent, down 10 basis points. Mercury's shares rose 2.2 per cent to a record $5.05.