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

NZ stocks gain as investors hunt for yield

NZ Newswire logoNZ Newswire 3/04/2017 Rebecca Howard

New Zealand shares gained on Monday, led by Z Energy and Spark as a decline in global bond yields boosts the attraction of local stocks with high dividends.

The S&P/NZX 50 Index rose 28 points, or 0.4 per cent, to 7225.02. Within the index, 16 stocks rose, 27 fell and seven were unchanged. Turnover was $136 million.

Hobson Wealth Partners investment adviser Brad Gordon said the market had performed well considering it is the beginning of a new quarter.

According to Mr Gordon, high yielding stocks benefited from the fact that 10-year Treasuries "have come off quite a bit, which is is quite strong for the yield play".

The yield on US 10-year Treasuries was recently near 2.4 per cent, down from 2.6 per cent in mid-March.

Companies with relatively high dividend yields gained, with Z up 2.3 per cent to $7.12 and Contact Energy gaining 2 per cent to $5.16.

Fisher & Paykel Healthcare added 1.6 per cent to $9.85, likely benefiting after the New Zealand dollar lost ground against the greenback in the latter part of the quarter, said Mr Gordon.

Spark, another company with a relatively high dividend yield, led the benchmark index higher, rising 3.1 per cent to $3.61.

The telecom group is in a takeover tussle for the much smaller TeamTalk, offering 80 cents a share as it seeks to exert more control over its input costs by owning infrastructure assets.

Chorus, which counts Spark as its biggest customer, fell 2.8 per cent to $4.20, the biggest decline on the benchmark index.

Mr Gordon noted companies in the aged-care space were benefiting from quite a bit of publicity from the Oceania Healthcare prospectus launch.

Late last week retirement village operator Oceania Healthcare said it planned to raise $200 million in a IPO to cut its debt and potentially buy new development sites and will list on the NZX and ASX.

The biggest loser was Orion Health, which dropped 14 per cent to $1.66.

image beaconimage beaconimage beacon