MARKET CLOSE NZ shares rise, paced by higher yield stocks

MARKET CLOSE NZ shares rise, paced by Telecom as higher yields draw demand

Oct. 15 (BusinessDesk) - New Zealand shares rose, led by companies with relatively high dividend yields such as Telecom as low interest rates worldwide stoke demand for assets offering bigger returns.

The NZX 50 Index rose 19.71 points, or 0.5 percent, to 3916.365. Within the index, 22 stocks rose, 18 fell and 10 were unchanged. Turnover was $67.5 million.

Telecom, the biggest company on the bourse, advanced 2.4 percent to $2.38 and has a dividend yield of 12.8 percent. That’s about three times the rate offered by a 12-month term deposit, according to interest.co.nz.

“Investors are looking for yield and New Zealand still offers yield,” said Keith Poore, head of investment strategy at AMP Capital (New Zealand), which has $16 billion of New Zealand assets under management. "Despite the rally that we've seen, valuations in equity markets relative to bonds are still favourable."

The number of mobile broadband subscribers rose 34 percent to 2.5 million in the 12 months ended June 30 compared to a year earlier, the government department said in its annual Internet Service Provider Survey.

PGG Wrightson, the nation’s biggest rural services company, rose 2.9 percent to 36 cents. Guinness Peat Group, the investment company selling down its portfolio, rose 2.8 percent to 55 cents.

Mainfreight, the transport and logistics company, gained 1.7 percent to $10.63.

GuocoLeisure, the investment group once known as Brierley Investments, rose 1.6 percent to 64 cents after reporting profit of US$23.2 million in the three months ended Sept. 30, from US$24.1 million a year earlier. Sales rose to US$104.5 million from US$96.8 million.

Fisher & Paykel Appliances fell 0.8 percent to $1.22. Chinese manufacturer Haier’s bid to take control of whiteware maker Fisher & Paykel Appliances is too low and it wants to be paid full value for its stake, according to AMP Capital Investors (New Zealand) portfolio manager Douglas Lau. AMP won’t be accepting the offer, he said.

Blis Technologies was unchanged at 0.7 cents after saying its K12 oral health probiotic proven to crowd out ‘bad’ bacteria in humans is to be tested as a treatment for dog bad breath. The Dunedin-based NZX-listed bioscience company said the recent success of a first phase trial on dogs has encouraged an expanded trial. The shares are down 78 percent this year.

OceanaGold, which operates the Macraes gold field, fell 4.4 percent to $4.11.

(BusinessDesk)

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