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Frenzy as $187m Spark shares change hands

NZ Newswire logoNZ Newswire 5/04/2017 Paul McBeth

New Zealand shares rose as international investors' hunt for high-yield stocks saw the biggest volume of Spark New Zealand stock change hands in almost five years.

Meanwhile, Comvita plunged after the honey products maker warned of lower earnings.

The S&P/NZX 50 index increased 20.52 points, or 0.3 per cent, to 7,244.54.

Within the index, 21 stocks gained, 18 fell and 11 were unchanged. Turnover was a bigger-than-usual $347 million, due largely to $187 million of trading in Spark shares.

Spark rose 0.8 per cent to $3.64, with 40 million shares trading at $3.65 in one trade, and has advanced 8.2 per cent in the past week, as foreign investors are attracted to New Zealand's relatively high dividend yields.

Spark is trading at a dividend yield of 6.9 per cent, according to Reuters data. A total of 51 million shares changed hands on Wednesday, the most since August 27, 2012.

"There's been quite strong demand for yield across a number of firms and Spark is one of them," said James Lindsay, a senior portfolio manager at Nikko Asset Management.

"In the last few weeks that dynamic has flowed through from the US and other markets and has come here."

Electricity generator-retailers, which typically offer attractive dividend yields, have also benefited, with Meridian Energy up 0.4 per cent to $2.90.

Trustpower, which is holding an investor briefing on Thursday, fell 0.4 per cent to $4.56, and its controlling shareholder Infratil gained 1.2 per cent to $2.93.

Sky Network Television led the benchmark index higher, gaining 3.5 per cent to $3.89.

Comvita was the worst performer on the NZX 50, sinking 17 per cent to $7.10, a month-low.

The Te Puke-based honey products maker warned it would deliver an annual operating loss, having previously picked a profit, as it struggles with a clamp down in China's informal trading channels and as weather saps the company's honey harvest.

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