MARKET CLOSE: NZX 50 charts new record high, led by Spark

MARKET CLOSE: NZX 50 charts new record as Spark attracts income hunters; VMob soars

By Paul McBeth

Jan. 26 (BusinessDesk) - New Zealand shares rose to a new record close as holidays in Auckland and Australia kept trading volumes light. The gains were led by companies offering relatively high dividend yields, such as Spark New Zealand.

The NZX 50 index rose 23.418 points, or 0.4 percent, to 5698.656. Within the index 24 stocks rose, 15 fell and 11 were unchanged. Turnover was a smaller than usual $59.4 million due to the public holidays.

New Zealand utility and property stocks offering high dividends have been attractive to global investors seeking a real return in a low interest rate environment, which has helped propel the local market higher in recent months. Spark, which has a dividend yield of 7.1 percent, rose 3.6 percent to $3.345, leading the benchmark index higher.

"The hunt for yield is driving our market and today is a continuation of that with Spark leading the charge," said David Price, a broker at Forsyth Barr in Wellington. "From a global perspective, our market on a yield basis stands out and that's what we're seeing."

Other gainers with reliable income streams included power companies Genesis Energy, which rose 1.4 percent to $2.23, Meridian Energy up 1.1 percent to $1.88 and MightyRiverPower, which advanced 0.6 percent to $3.44. Industrial property investor Property For Industry gained 1.3 percent to $1.58, while pay-TV operator Sky Network Television rose 1 percent to $6.04.

Retailer Kathmandu Holdings gained 2 percent to $2.05 and dairy marketer A2 Milk Co rose 1.8 percent to 57 cents.

Fletcher Building, the biggest company on the stock market, increased 0.5 percent to $8.35, while Auckland International Airport edged up 0.2 percent to $4.41.

Dual-listed Australian bank Westpac Banking Corp fell 2.5 pecent to $35.50, the biggest decliner on the day. Australia & New Zealand Banking Group fell decreased 0.2 percent to $34.40.

Xero fell 1.6 percent to $16 after US fund manager Fidelity Investments ceased to be a substantial shareholder when a series of sales in the past week reduced its stake to 4.8 percent.

Outside the benchmark index, TeamTalk dropped 22 percent to 90 cents, adding to its 32 percent slump on Friday when it warned first-half profit was marginally positive compared to $2.2 million a year earlier.

NZAX-listed VMob's shares more than doubled to 2.4 cents after the smart-phone voucher app firm signed a global deal with McDonald's that will see an immediate roll-out of its platform in the US. The company also raised $2.17 million in a private placement to investors at 1.06 cents per share.

(BusinessDesk)

© Scoop Media