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NZ shares rise as investors seek stability

NZ NewswireNZ Newswire 28/06/2016 Sophie Boot
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New Zealand shares rose as investors embraced the local market's insulation from global turmoil and high yields, with Spark, Precinct Properties and Summerset Group rising.

The S&P/NZX 50 Index gained 29.65 points, or 0.4 per cent, to 6,716.58. Within the index, 31 stocks rose, 13 fell and six were unchanged. Turnover was $152.4 million.

The local bourse dropped 2.3 per cent on Friday after the United Kingdom referendum vote to leave the European Union.

It recovered on Monday and has continued to rise, albeit on lighter volumes as investors were happy to sit tight, said Grant Williamson, director at Hamilton Hindin Greene.

"With offshore markets still under pressure overnight, New Zealand is holding relatively firm," Williamson said.

"It's an indication we're quite removed from the turmoil, and maybe underpins our attractive dividend yield and investors still chasing those attractive returns. Local investors are holding in there, there's no panic when it comes to the local market - even the foreign investors are relatively happy to hold in, at the moment anyway."

Spark was the biggest gainer, up 3.1 per cent to $3.52.

Property companies gained, with Precinct Properties rising 2.5 per cent to $1.24, Summerset Group Holdings up 1.6 per cent to $4.36, Argosy Property advancing 1.4 per cent to $1.125, and Vital Healthcare Property Trust gaining 1.3 per cent to $2.195.

Kiwi Property Group gained 0.4 per cent to $1.45.

Xero fell 2.4 per cent to $17.10. The virtual accounting software company, which is yet to post a profit, was sold off heavily in Friday's turmoil but bounced yesterday.

"You are going to see volatility amongst those higher-risk companies - they're not profitable, it's difficult to value them on fundamentals so investors are more likely to buy and sell on a whim," Williamson said.

Meridian Energy dropped 2 per cent to $2.47, Tegel Group fell 1.8 per cent to $1.62 and Sky Network Television dropped 1.7 per cent to $4.58.

Outside the main index, Smiths City Group gained 3.7 per cent to 56 cents. Chief executive Roy Campbell has increased his holding in the retailer he joined in 2015 buying shares in an off-market purchase. His holding now amounts to 0.07 per cent of the retailer.

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