MARKET CLOSE: NZ shares rise as investors chase yield
By Suze Metherell
Oct. 1 (BusinessDesk) - New Zealand stocks rose, paced by Spark New Zealand as investors were lured to the local bourse's relatively high yields. Infratil rose as it sealed the sale of its Australian energy assets and signalled a capital return. Genesis Energy fell as it shed rights to its dividend.
The NZX 50 Index rose 19.546 points, or 0.4 percent, to 5274.583. Within the index, 29 stocks rose, 14 fell and seven were unchanged. Turnover was $107.7 million.
Over the past quarter the benchmark index has gained some 2.2 percent, as the return of Prime Minister John Key and his National government for a third term gave investors confidence the regulatory environment would remain the same. The market was further supported by demand for high-dividend yielding stocks in a global environment were interest rates remain at historic lows. Spark, which offers a dividend yield of 6.1 percent, advanced 2.0 percent to $3.03, recovering after shedding rights to its final 9 cents per share dividend last week.
"We've seen some money flow to the yield players," said Greg Smith, head of research in Fat Prophets. "The New Zealand market is one of the highest yielding around and then there is a little bit of euphoria post the election."
Property trusts, which are held for the steady income stream, rose. Property For Industry climbed 1.1 percent to $1.39. DNZ Property Fund rose 0.6 percent to $1.735. Goodman Property Trust increased 0.5 percent to $1.065. Precinct Properties New Zealand edged up 0.5 percent to $1.09. Kiwi Income Property Trust lifted 0.4 percent to $1.17.
Infratil, the infrastructure investor, climbed 2.1 percent to $2.89. The Wellington-based investor has lowered earnings guidance for the coming year by as much as $40 million, reflecting the sale of its Australian energy assets.It now expects annual earnings before interest, tax, depreciation, amortisation and asset valuation changes will be between $520 million and $545 million in the year ended March 31, 2015, from a previously advised range of between $530 million and $560 million, but still above its 2014 Ebitdaf of $500 million. Yesterday, it finalised the A$646 million sale of its Australian energy assets, Lumo Energy and Direct Connect, to Snowy Hydro, and has flagged a capital return to shareholders with some of the proceeds, which are expected to come in between $335 million and $345 million..
Shedding final dividends were Genesis Energy, which fell accordinginly by 3 percent, or 6 cents, to $1.96; Ebos Group, down 2.2 percent, or 20 cents, to $9.05, and Auckland International Airport declined 1.3 percent, or 5 cents, to $3.80.
Metlifecare, the retirement village operator, rose 1.1 percent, or 5 cents, to $4.65, despite shedding rights to its 2.5 cents final dividend.
NZX fell 1.6 percent to $1.24. The company, which operates the New Zealand stock exchange and the dairy futures market, is offering a Milk Production Predictor, which estimates New Zealand milk production for the coming three months, with forecasts based on climate, pasture growth and cow numbers.
Fletcher Building, the nation's largest listed company, fell 0.5 percent to $8.74.
Outside the benchmark index, Pyne Gould Corp was unchanged at 39 cents. The Guernsey-based asset management firm controlled by George Kerr said it missed yesterday's deadline to submit its final audited accounts for the 2014 year to the stock exchange because of a delay in auditing one of the larger property investments in its Torchlight Fund.