NZ shares march higher as low rates keep yield attractive

Vital Healthcare Property Trust led the market higher, up 3 per cent at $2.75. Photo / Getty Images

New Zealand shares continued their march into uncharted territory as the low interest rate outlook continues to boost the allure of firms paying reliable dividends, such as property investors and power companies.

The S&P/NZX 50 Index rose 98.54 points, or 0.9 per cent, to 11,106.67. Within the index, 33 stocks rose, 10 fell, and seven were unchanged. Turnover was $155.4 million.

The local market joined a global rally as investors were buoyed by news that US and Chinese officials will return to the negotiating table. Their trade war threatens to derail the international economy and has encouraged central banks to cut interest rates, which boosts the attraction of stocks.

Vital Healthcare Property Trust led the market higher, up 3 per cent at $2.75 on a volume of 282,000 units, compared to a 90-day average of 263,800.

Genesis Energy rose 3 per cent to $3.65, Goodman Property Trust was up 1.8 per cent at $2.215 on a volume of 1.4 million units, and Meridian Energy increased 3 per cent to $5.54 with 1.8 million shares changing hands.

Grant Williamson, a director at Hamilton Hindin Greene, said low rates continued to drive the share market higher, with a number of high-quality stocks, such as Meridian and Goodman, coming in for special attention when the Australian market opened.

"Some stocks are very hot at the moment," he said.

A weaker currency is also providing support for exporters. A2 Milk advanced 2.6 per cent to $15.10, Scales Corp rose 2.3 per cent to $4.91, Fisher & Paykel Healthcare increased 2.1 per cent to $17.20 and Vista Group International was up 1.2 per cent at $4.11. Pushpay Holdings rose 0.9 per cent to $3.29 on a bigger volume than normal of 2.2 million shares.

Spark New Zealand was the most traded stock on a volume of 3.7 million shares, compared to its 3.3 million average. It rose 0.7 per cent to $4.57.

Trading in Sky Network Television was unusually active with a volume of 2.4 million shares. The stock was unchanged at $1.11. The NZ Herald reported that the pay-TV operator will offer $400m to secure the next five-year cycle for rugby rights.

Air New Zealand dipped 0.2 per cent or 0.5 cents, to $2.215 on a volume of 1.6 million shares. The stock shed rights to its 11-cent dividend today.

Of other companies trading on volumes of more than a million shares, SkyCity Entertainment Group increased 1.3 per cent to $3.90, Kiwi Property Group was up 2.1 per cent at $1.675, NZX was unchanged at $1.27, Z Energy rose 0.6 per cent to $6.54, and Contact Energy decreased 0.2 per cent to $8.92.

Auckland International Airport was down 2.8 per cent at $9.44, the day's biggest decline, on a volume of 1.3 million shares. The NZ Herald reported that Air New Zealand is working on plans for a second airport to service the country's biggest city.

Fonterra Shareholders' Fund units decreased 1.2 per cent to $3.22.

Stride Property slipped 0.4 per cent to $2.34 after saying it will spin out its industrial properties into a joint venture with international institutional investors. Investore Property, which was also spun out of Stride, rose 0.5 per cent to $1.93, even as it shed rights to a 1.9 cent dividend.

Fletcher Building rose 0.4 per cent to $4.62 after government data showed the value of building work in the June quarter was almost 12 per cent higher than a year earlier. The volume of work was lower than expected.

Of other companies exposed to the building sector, Metro Performance Glass fell 5 per cent to 28.5 cents, Cavalier Corp rose 3.6 per cent to 29 cents, and Steel & Tube was up 1.2 per cent at 86 cents.

Outside the benchmark index, Smiths City Group was unchanged at 27 cents. The retailer told shareholders today that it's restructuring plan is making progress, but that it expects to report weaker first-half sales due to store closures and an uncertain retail outlook.

Cannasouth climbed 16 per cent to 52 cents on a volume of 976,000 shares. That's the first time it's closed above its initial public offering price of 50 cents since listing in June.

Napier Port Holdings rose 0.3 per cent to $3.08, well above its $2.60 IPO price. About 1 million shares changed hands.

Heartland Bank's 2024 bonds paying 3.55 per cent were the most traded debt security with a volume of 697,000. The notes closed at a yield of 2.56 per cent, down 4 basis points. Heartland Group's shares were up 0.6 per cent at $1.60.