Hunt for yields drives shares to record

Spark shares closed up 3.6 per cent yesterday at $3.345.

Spark, with a dividend yield of 7.1%, leads charge as public holidays in Auckland and Australia keep trading light.

New Zealand shares rose to a new record close yesterday as holidays in Auckland and Australia kept trading volumes light. The gains were led by companies offering relatively high dividend yields, such as Spark New Zealand.

The NZX 50 index rose 23.42 points, or 0.4 per cent, to 5698.66. Within the index 24 stocks rose, 15 fell and 11 were unchanged. Turnover was a smaller-than-usual $59.4 million because of the public holidays.

New Zealand utility and property stocks offering high dividends have been attractive to global investors seeking a real return in a low-interest-rate environment, which has helped propel the local market higher in recent months.

Spark, with a dividend yield of 7.1 per cent, rose 3.6 per cent to $3.345, leading the benchmark index higher.

"The hunt for yield is driving our market and today is a continuation of that with Spark leading the charge," said David Price, a broker at Forsyth Barr. "From a global perspective, our market on a yield basis stands out and that's what we're seeing."

Other gainers with reliable income streams included power companies Genesis Energy, which rose 1.4 per cent to $2.23, Meridian Energy, up 1.1 per cent to $1.88, and Mighty River Power, which advanced 0.6 per cent to $3.44. Industrial property investor Property For Industry gained 1.3 per cent to $1.58, while pay-TV operator Sky Network Television rose 1 per cent to $6.04.

Retailer Kathmandu Holdings gained 2 per cent to $2.05 and dairy marketer A2 Milk Co rose 1.8 per cent to 57c.

Fletcher Building, the biggest company on the stock market, increased 0.5 per cent to $8.35, while Auckland International Airport edged up 0.2 per cent to $4.41.

Dual-listed Australian bank Westpac Banking Corp fell 2.5 per cent to $35.50, the biggest decliner on the day. Australia & New Zealand Banking Group decreased 0.2 per cent to $34.40.

Xero fell 1.6 per cent to $16 after United States fund manager Fidelity Investments ceased to be a substantial shareholder when a series of sales in the past week reduced its stake to 4.8 per cent.

Outside the benchmark index, TeamTalk dropped 22 per cent to 90c, adding to its 32 per cent slump on Friday when it warned first-half profit was marginally positive compared with $2.2 million a year earlier.

NZAX-listed VMob's shares more than doubled to 2.4c after the smart-phone voucher app firm signed a global deal with McDonald's that will see an immediate roll-out of its platform in the US. The company also raised $2.17 million in a private placement to investors at 1.06c a share.