MARKET CLOSE: NZX50 gain as low rates bolsters confidence

MARKET CLOSE: NZ shares gain as low interest rates bolster investor confidence

By Paul McBeth

Jan. 27 (BusinessDesk) – New Zealand shares gained for a third day as the prospect of globally low interest rates for an extended period stoked investors’ appetite for riskier, or higher-yielding, assets such as stocks. Fletcher Building paced gainers.

The NZX 50 Index rose 12.97 points, or 0.4 percent, to 3294.64. Within the index, 22 stocks gained, 13 fell and 15 were
The local stock market followed Australia’s S&P/ASX 200 index, which gained 0.5 percent to 4292.9 in afternoon trading.

“The Australian market bounce gave a bit of confidence back into things,” said Shane Solly, portfolio manager at Mint Asset Management. “Markets are all about the Federal Reserve’s low interest for a very long time and that’s giving a boost to equities and riskier assets at the moment.”

Fletcher Building, the biggest company on the exchange, gained 2.2 percent to $6.54 as it continues to bounce back from last month’s lows when it was “overly weak,” Solly said. Sky Network Television rose 1.4 percent to $5.15, and was another stock that was bouncing back from being over sold, he said.

Fellow index heavyweight Telecom fell 1.6 percent to $2.095.

The dual-listed Australian financial services firms gained on the day, with AMP up 1.5 percent to $5.55, and Australia & New Zealand Banking rising 1.8 percent to $28.

The prospect of the partial floats of the state-owned energy companies helped bolster confidence, and the Treasury today announced the joint lead managers running the first sale of Mighty River Power in the third quarter of the year. Stock exchange operator NZX was unchanged at $2.61 today.

Rival power company Contact Energy gained 0.4 percent to $4.77 today, as it continues to bounce back from an eight-and-a-half year low it touched earlier this week.

Components maker Rakon was the biggest gainer on the day, up 9.7 percent to 68 cents, the highest level since Nov. 14, extending its weekly rally to 12 percent. Whiteware manufacturer Fisher & Paykel Appliances rose 4.4 percent to 35.5 cents, while gold miner OceanaGold advanced 3.3 percent to $3.10.

Carpet maker Cavalier Corporation was the biggest decliner, falling 6 percent to $2.35 on thin trading volumes, while tapmaker Methven declined 1.9 percent to $1.05.

Energy explorer NZ Oil & Gas extended its decline, falling 1.4 percent to 73 cents after it yesterday said it will fully impair its investment in Pike River Coal in the upcoming first-half financial statements.

(BusinessDesk)

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