NZ stocks extend gains, buoyed by local rates outlook; Spark, Z rise

New Zealand shares rose as benign comments from the US and local central banks supported a more positive outlook through to the end of the year.

Friday, November 9th 2018, 5:25PM

by BusinessDesk

The S&P/NZX 50 index rose 35.39 points, or 0.4 percent, to 8,931.40. Within the index, 28 stocks rose, seven were unchanged and 15 fell. Turnover was $103 million.

Greg Smith, head of research at Fat Prophets, said events this week have been good for investor sentiment globally.

The Democrats winning control of the US House of Representatives will provide a check on the Trump administration that “has been known to unnerve a few people from time to time”.

A rate rise in the US in December is still likely, but any thawing in trade relations between China and the US at the G20 talks later this month could generate a “risk-on rally into the end of the year,” Smith said.

The Reserve Bank’s reluctance to raise rates should also keep the local dollar low to the benefit of exporters and tourism operators, he said.

Spark New Zealand was the heaviest traded stock today with more than 3.3 million shares changing hands. It rose 0.6 percent to $4.065.

Smith said the firm’s announcement this week that it would move into its own sports content production showed it was still capable of being a disruptor on a number of fronts.

Air New Zealand rose 0.5 percent to $3.065. The 2.04 million shares traded was roughly twice the daily average the past three months.

Fuel retailer Z Energy also continued to slow claw-back from last week’s three-year low. Julia Raue was the latest director to report share purchases this week. The stock was up 3 percent at $5.77 today, with almost 1.4 million shares traded.

Units in the Fonterra Shareholders Fund fell 0.4 percent to $4.84. First NZ Capital said the company needs to seize the opportunity provided by the change in senior leadership to focus on value, and potentially quit poor performing brands.

Synlait Milk lifted 1.8 percent to $8.86 while A2 Milk fell 0.3 percent to $10.42. Smith said the companies are well-positioned in the growth market of China. While that’s not without risk, he said there would be good support for A2 anywhere around $10.

Fast food operator Restaurant Brands rose 0.8 percent to $8.65. The company today said talks on the sale of 75 percent of the business to Finaccess Capital are going well.

Warehouse Group rose 0.5 percent to $2.10. The firm said first-quarter sales rose 3.6 percent and margins improved at its stationery and general merchandise chains. It noted the market remains very competitive in general merchandise, apparel and in the appliance and technology sector Noel Leeming operates in.

Trade Me Group rose 2 percent to $5.12. More than 1.4 million shares changed hands, three-times the daily average. The company yesterday said revenue in the past four months was up 9 percent on last year, with earnings before interest and tax 10 percent higher.

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