MARKET CLOSE: NZ stocks rise; Telecom gains ahead of dividend, Chorus climb
By Suze Metherell
March 17 (BusinessDesk) – New Zealand stocks gained as investors sought out companies such as Telecom with relatively
defensive earnings and reasonable dividend yield. Chorus rose as the network operator’s appeal against the regulator’s
pricing methodology began in the Wellington High Court.
The NZX 50 Index rose 8.702 points, or about 0.2 percent, to 5088.026. Within the index, 20 stocks rose, 19 fell and 11
were unchanged. Turnover was $136.2 million.
Geo-political tensions in Ukraine, where Crimea has voted to rejoin Russia has stoked risk aversion among investors who
are also looking for evidence China will manage to meet its target of 7.5 percent annual economic growth. New Zealand
figures this week are expected to show the economy grew 0.9 percent in the fourth quarter, near the forecast the central
bank gave last week when it hiked interest rates.
Telecom gained 1.2 percent to $2.48. New Zealand’s biggest telecommunications provider will shed rights to its 8 cents
per share interim dividend on Wednesday. At today’s price it has a dividend yield of 6.5 percent.
“Telecom rose ahead of going ex-dividend and is seen as a great income even in a rising interest rate environment, and
is relatively defensive,” said James Smalley, a director at Hamilton Hindin Greene. “The market as a whole is following
what is going on, particularly in those overseas markets economically in China and politically in the Ukraine and it is
definitely going to move our market one way or the other.”
Other defensive stocks such as the property sector gained. Kiwi Income Property rose 0.9 percent to $1.145, Argosy
Property lifted 0.6 percent to 91.5 cents, Property for Industries advanced 0.4 percent to $1.205 and Precinct
Properties climbed 0.5 percent to $1.02.
Chorus gained 0.3 percent to $1.68, and has declined 41 percent in the past 12 months. The telecommunications
infrastructure builder is appealing the Commerce Commission’s pricing of its copper lines, arguing that the modelling
the regulator used was too narrow and ignored a section of legislation aiming to support the government’s aims in
building a nationwide fibre network.
“Chorus is holding up quite nicely - still a large number of question marks revolving around the stock which probably
won’t get resolved for some months, and or years,” Smalley said. “But the worst seems to be over in terms of foreign
funds selling out of the stock, which was what really drove it down.”
Warehouse Group, the biggest retailer on the bourse, rose 1.6 percent to $3.27. Consumer confidence is at a nine-year
high, according to the Westpac McDermott Miller Consumer Confidence Index. The survey results come less than a week
after the Reserve Bank raised interest rates from historic low levels on concern a buoyant economy will push up
inflation.
Fletcher Building, New Zealand’s largest listed company, rose 0.2 percent to $9.60. Auckland International Airport rose
0.5 percent to $3.92. Xero, New Zealand’s second largest listed company, gained 0.3 percent to $42.05.
Melbourne-based gold miner OceanaGold led the index higher, jumping 11 percent to $3.25.
Fisher & Paykel Healthcare fell 1.6 percent to $4.21. The breathing apparatus manufacturer exporter, which counts the United
States as its biggest market, finishes its financial year at the end of this month and investors are waiting to see how
it will manage the headwind of a continuing high kiwi dollar, said Smalley.
Industrial rubber goods maker Skellerup was the benchmark index’s worst performer, dropping 3.3 percent to $1.77.
(BusinessDesk)