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Stocks inch higher as yields back in play

NZ Newswire logoNZ Newswire 6 days ago Rebecca Howard

New Zealand stocks edged higher on Tuesday as interest in high-yielding stocks including Trustpower and several property companies was offset by some portfolio reshuffling.

This came after the Oceania Healthcare initial public offering weighed on stocks such as Ryman Healthcare and Summerset Group.

The S&P/NZX 50 index increased 3.8 points, or 0.05 per cent, to 7233.6. Within the index, 18 stocks fell, 20 rose and 12 were unchanged. Turnover was $114 million.

Stocks across Asia were mixed with Australia's S&P/ASX 200 index down 1.1 per cent in afternoon trading while China's Shanghai Stock Exchange Composite Index up 0.2 per cent as investors remained nervous about tensions between the US and North Korea.

Brad Gordon, investment adviser for Hobson Wealth Partners noted overall trading remained tepid as many investors are jittery, in particular about tensions between the US and North Korea. "I have had conversations with very concerned clients," he said.

Given that US 10-year Treasuries remain well off their highs "I think the yield trade is back on. We are seeing some support coming in for property trusts and other yield plays," said Mr Gordon.

Among those yield plays, Trustpower added 2.4 per cent to $4.79. Investors were also cheered late last week when Trustpower said annual earnings were at the higher end of guidance after strong generation, especially in Australia.

Outdoor clothing retailer Kathmandu Holdings led the index higher, rising 3.1 per cent to $2.01

Orion Health rose 5.2 per cent to $1.41 after news it had signed a $9.3 million five-year contract to license its Amadeus precision medicine platform to Dorset County Council in England.

Warehouse Group was unchanged at $2.22 after it said it has entered into an unconditional contract to sell its Newmarket property in Auckland for $65 million and tagged the proceeds to reduce debt.

In the other direction, Ryman Healthcare shed 1.3 per cent to $8.54 while Summerset lost 2.8 per cent to $5.18.

Fletcher Building added 0.4 per cent to $8.02. Speculation re-emerged about a break-up or buyout of Fletcher Building.

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