NZX50 climbs 4.1% in week; yield demand reigns

The S&P/NZX 50 Index hit a record this week. Photo / File

The S&P/NZX 50 Index hit a record, rising 4.1 per cent this week with high-yielding utilities and property stocks still in hot demand against a backdrop of ultra-low interest rates.

The benchmark index was up 112.32 points, or 1 per cent, at 11,218.99. Within the index, 39 stocks rose, six fell, and five were unchanged. Turnover was a healthy $194.8 million, more than the $159m daily average during August.

Stock markets were buoyed yesterday by news that the US and China will resume negotiations in their protracted trade war, which has threatened to derail global growth. The prospect of shrinking trade and a worldwide recession has encouraged central banks to cut interest rates, prompting investors to turn to equity markets to seek real returns.

"There's some renewed hope regarding the China-US trade tensions, but given the false dawns we've had there, there's every chance it turns on a dime again," said Matt Goodson, managing director at Salt Funds Management.

Property stocks and power companies attracted heavy trading. Meridian Energy, Contact Energy, Mercury NZ, Goodman Property Trust and Genesis Energy are leading the benchmark index higher this year with gains of up to 58 per cent.

Goodson said there has been very aggressive buying of the gen-tailers and property stocks this week, which showed signs of being from overseas passive investors.

"If it's passive buying, there's no explanation required. It's not about making sense, it's just about investing the flow," he said.

Meridian fell 3.3 per cent to $5.335, the day's biggest decline, on a volume of 3.8 million shares, more than twice its 1.4 million 90-day average.

Kiwi Property Group was up 0.9 per cent at $1.69 on a volume of 2.9 million shares. Contact Energy rose 0.7 per cent to $8.98 on 2.6 million, and Genesis increased 0.3 per cent to $3.66 with 1.6 million shares changing hands. Goodman was up 0.2 per cent at $2.22 on a volume of 1.3 million and Mercury rose 2.7 per cent to $5.62 with 1.2 million shares changing hands.

Spark New Zealand was the most traded stock on a volume of 7.1 million shares, more than twice its 3.3 million average. It rose 1.6 per cent to $4.645.

Of other stocks trading on volumes of more than a million shares, Sky Network Television rose 1.8 per cent to $1.13, Fletcher Building was up 2 per cent at $4.71, Z Energy increased 0.2 per cent to $6.55, Air New Zealand rose 1.6 per cent to $2.86 and Summerset Group advanced 0.6 per cent to $6.30.

Exporters remained in favour despite the kiwi dollar recovering from its four-year low earlier in the week. Tourism Holdings led the market higher, up 3.7 per cent at $3.89 on a volume of 68,000 shares, less than half its 159,000 average. Vista Group International rose 3.4 per cent to $4.25, Scales Corp increased 2.9 per cent to $5.05, and Fisher & Paykel Healthcare advanced 2.6 per cent to $17.64.

Vector fell 1.5 per cent, or 5 cents, to $3.65 after shedding rights to an 8.25 cent dividend.

Fonterra Shareholders' Fund units fell 1.2 per cent to $3.18. Fonterra today said it will delay releasing its annual report to give it more time to complete its audited accounts.

Synlait Milk rose 2.2 per cent to $9.45 on a volume of 107,000 shares. It was added to the S&P/ASX 300 Index, effective from September 23. A2 Milk increased 2 per cent to $15.40.

Outside the benchmark index, IkeGPS climbed 14 per cent to 58 cents after saying it was nearing a break-even position and expected to report a record September quarter revenue.

Cannasouth rose 12 per cent to 58 cents, its second day closing above the 50-cent initial public offering price.

Summerset's 2025 bond paying 4.2 per cent was the most traded debt security on a volume of 163,000. The notes closed at a yield of 2.64 per cent, up 4 basis points.