MARKET CLOSE: NZ shares rise for second day as dividends appeal, NZX leads, Heartland falls
Sept. 1 (BusinessDesk) - New Zealand shares rose for a second day, as the relatively attractive dividend yields on offer drew investors to stocks including bourse operator NZX Ltd. and Sky Network Television Ltd.
The NZX 50 Index rose 9.2, or 0.3%, to 3332.27. Within the index, 20 stocks rose, 20 fell and 10 were unchanged. Turnover was $122.2 million.
The New Zealand dollar fell to 84.94 U.S. cents from 85.16 cents this morning, as was down from 85.47 cents late yesterday. The trade-weighted index declined to 72.65 from 72.86 early today and 72.95 yesterday.
NZX rose 3.5% to $2.38. The company shed its 2.75 cents interim dividend yesterday. Sky TV, which is carrying a special dividend of 25 cents and a final payment of 10.5 cents until Sept. 7, gained 1.6% to $5.84. Australian wealth manager AMP Ltd. climbed 0.7% to $5.70 on the NZX - investors who buy the stock until Sept. 7 are entitled to its 15 cent interim payment.
"One good thing about our market, which is almost unique, our dividends are quite high and a lot of them are tax free," said Alan Moore, an executive director at Milford Asset Management. "And there's not a lot of attractive fixed interest around."
Air New Zealand is to announce the coupon offered on its $150 million of November 2016 no later than Sept. 5, the day the offer opens. With shares including Vector Ltd. offering a gross dividend yield of around 8%, fixed-interest securities need investors to want the security of payment rather than exposure to economic growth.
Would-be bank Heartland New Zealand Ltd. was the biggest decliner on the index, falling 3.5% to 56 cents. The lender yesterday said shareholders subscribed to just one-third of a $35 million share purchase plan, with the bulk being purchased by the scheme’s underwriters.
Vector's shares fell 0.4% to $2.51 today. The lines company pays its 7.5 cent final dividend to those holding the shares on Sept. 12. Its payout ratio has risen to 56% from 51%.
Kathmandu Holdings, the outdoor equipment chain, rose 2.5% to $2.07. Last month the retailer said pretax earnings for the year ended July 31 would rise as much as 36% to $65 million. It releases its formal results on Sept. 21 and has a dividend yield of 7.1% based on the past 12 months of payments.
Helping underpin optimism about the outlook for the New Zealand economy, government figures today showed the nation's terms of trade – the amount of imports that can be funded by a fixed quantity of exports – rose to its highest level in 37 years in the second quarter, driven by gains in export prices of dairy products, petrol products, meat and wool.
Rakon Ltd., the manufacturer of crystal timing devices, fell 1.3% to 78 cents, extending its slide since announcing that annual operating profit could fall as much as 44% for the year ending March 2012 if the New Zealand dollar remains are current levels, with EDITDA coming in at between $14 million and $18 million for the year ending March 2012.
Telecom Corp., which plans to split into two, declined 1.2% to $2.50. Standard & Poor's said yesterday it is likely to cut services company New Telecom's rating one notch below Telecom's current rating to "A-" and that it will rate network company New Chorus an investment grade "BBB".
Telstra Corp., Telecom's Australian rival, rose 1.8% to $3.88 on the NZX after reports the Australian Competition and Consumer Commission's concerns over its separation plan across the Tasman probably wouldn't delay the split.