Property stocks attract attention

Property stocks and new listings centre of attention.

Thursday, March 25th 2021, 6:36PM

by BusinessDesk

Construction firm Fletcher Building led the market higher today, up 3.3% to $6.92. New builds are exempt from the stricter tax rules for property, which may encourage more construction activity.

The S&P/NZX 50 Index rose 29.18 points, or 0.2%, to 12,388.06. Within the index, 22 stocks fell, 22 rose and six were unchanged. Turnover was $165.5 million.

Shares in Kiwi Property Group jumped 2.9% to $1.25 after a draft revaluation of its property portfolio added $100m, or 3.1%, to its value in just six months.

The property investment company is focused on large scale retail property investments, but benefits from the soaring house prices which boosts land values.

Stock market operator NZX jumped 2.5% to $2.03. Two large companies are considering listing on the exchange: telecommunications firm 2degrees has said an initial public offer is on the cards, while Westpac Bank is toying with the idea of divesting its NZ subsidiary.

The Warehouse Group will resume paying a dividend after reporting a record first-half result but has lowered how much it will pay out to shareholders. Its shares jumped 3.6% to $3.78.

Automated food systems designer MHM Automation's shares jumped 7.1% to 75 cents after it secured a number of significant new contracts, including one for $13m from an Australian red meat exporter.

The kiwi dollar continued to slide after government policy designed to slow property market speculation sent the currency to its lowest level since November.

The kiwi dollar was trading 69.76 US cents at 5pm in Wellington, down from 69.80 cents yesterday. Prior to the announcement it had been trading near 72 cents.

The trade-weighted index was at 73.30 at 5pm, from 73.26 yesterday. The kiwi traded at 91.75 Australian cents from 91.76 cents, 75.98 yen from 75.75 yen, 59.00 euro cents from 58.92 cents, 50.92 British pence from 50.85 pence, and was unchanged at 4.5530 Chinese yuan.

Some economists predict the government's new controls may dampen house prices and slow the economy in the process.

The yield on 10-year government bonds also declined sharply as investors show less confidence and predict the Reserve Bank will try to keep interest rates low for longer.

The yield has fallen from above 1.8% just days ago, to as low as 1.5%. This is welcome news for equity investors, as the climbing interest rates was pulling shares lower.

Tags: Market Close