You are using an older browser version. Please use a supported version for the best MSN experience.

Low rates prospect draws investors to NZX

NZ NewswireNZ Newswire 5/07/2016 Jonathan Underhill
Air New Zealand advanced 1.9 per cent to $2.15 and Auckland International Airport rose 1.1 per cent to $6.82. © AAP Air New Zealand advanced 1.9 per cent to $2.15 and Auckland International Airport rose 1.1 per cent to $6.82.

New Zealand shares rose as the prospects of interest rates staying low drew investors to the equity market in search of better returns. Air New Zealand, Metlifecare and Ryman Healthcare gained.

The S&P/NZX 50 Index rose 30.04 points, or 0.4 per cent, to 6970.99, an all-time high. Within the index, 31 stocks gained, 14 fell and five were unchanged. Turnover was a relatively modest $109 million, with no tailwind from US markets closed for Independence Day on Monday.

The yield on 10-year government bonds fell to a record-low of 2.315 per cent today and two-year term deposits are paying interest of just 3.39 per cent, a meagre return compared to rates of above 4.7 per cent on offer two years ago.

"There's still a lot of political uncertainty but people are ignoring that at the moment and the clearest thing coming through is that interest rates are likely to stay low," said Greg Easton, an adviser at Craigs Investment Partners.

Air New Zealand advanced 1.9 per cent to $2.15 and Auckland International Airport rose 1.1 per cent to $6.82.

Meridian Energy rose 1.6 per cent to $2.60. Metlifecare led gains among retirement village operators, rising 1.8 per cent to $5.68. Summerset Group Holdings rose 1.8 per cent to $4.59 and Ryman gained 1.3 per cent to $9.40.

Heartland Bank rose 1.7 per cent to $1.23, while Westpac fell 1 per cent to $29.80 and ANZ declined 1.5 per cent to $24.35.

Fonterra Shareholders' Fund gained 0.7 per cent to $5.49 ahead of the GlobalDairyTrade auction overnight.

Chorus fell 1.7 per cent to $4.27 while Spark edged up 0.1 per cent to $3.56.

Port of Tauranga slipped 0.3 per cent to $19.78.

Colonial Motor Co rose 3.2 per cent to $6.40 after the motor vehicle distributor said it expects to post a record profit in 2016 on strong sales of Fords and Mazdas. Profit would exceed the $16.3 million it posted in 2015 and its previous record of $19.3 million a year earlier.

"The new vehicle industry in which we operate has achieved all-time record levels and, in the first six months of this calendar year, new vehicle sales have grown by 5 per cent over the comparable period of the previous year," chairman Jim Gibbons said.

image beaconimage beaconimage beacon