MARKET CLOSE: NZ shares gain as investors eye upcoming Fed meeting
By Paul McBeth
June 18 (BusinessDesk) - New Zealand shares joined a rally across Asia, as investors have one eye on whether the Federal
Reserve will signal lower US interest rates in what would be a further boon for equity markets. Vista Group
International led the market higher.
The S/NZX 50 Index rose 21.07 points, or 0.2 percent, to 10,191.33. Within the index, 25 stocks gained, 16 fell, and nine
were unchanged. Turnover was $125.5 million.
Stocks across Asia were generally stronger, with Australia's S/ASX 200 Index up 0.5 percent in late trading and Singapore's Straits Times Index rising 0.8 percent. The Federal Open
Market Committee will review US rates this week, and investors are hoping for a steer on whether the world's biggest
central bank will cut its benchmark interest rate.
"The market's drifting sideways a little bit, waiting for the outcome of the FOMC meeting," said Craigs Investment
Partners investment advisor Peter McIntyre.
"Market pricing is that rates are going to go lower - the market's not looking for an immediate rate cut, but is looking
for confirmation that over the coming six months the Fed is going to cut rates, which is supportive for equities."
Tech stock Vista, an export firm which develops cinema analytics software, led the market higher. It was up 4.6 percent
at a record close of $6.12 on 93,000 shares, less than its 90-day average of 391,000.
Low rates have underpinned New Zealand's benchmark stock index and its large contingent of infrastructure companies,
utilities, and property stocks which typically pay reliable dividends.
Infrastructure investor Infratil is among those firms, and closed at a record $4.59, up 2.9 percent, on a volume of 1.2
million shares. That was almost twice its 90-day average. The company allotted 45.5 million shares issued under the
retail component of its $400 million capital raising.
McIntyre said the shares were issued at $4 each, meaning those investors who took up their entitlements are already in
Meridian Energy rose 2 percent to $4.50 on a volume of 2 million shares, Ryman Healthcare advanced 1.9 percent to
$11.58, Contact Energy increased 1.3 percent to $7.62 and Chorus was up 1.3 percent at $5.85.
Spark New Zealand was the most traded stock on a volume of 3.3 million shares, down on its usual volume of about 5.4
million. It rose 1.6 percent to $3.91 after saying it will offer free access to streaming coverage of the Rugby World
Cup for customers who sign up to certain mobile or broadband contracts.
Sky Network Television, which has had a strong grip on rugby broadcast rights for the past two decades, rose 1.7 percent
Of other companies trading on volumes of more than a million shares, SkyCity Entertainment Group was unchanged at $3.78,
Z Energy rose 0.3 percent to $6.10, Oceania Healthcare decreased 1 percent to $1.04, Auckland International Airport fell
0.7 percent to $8.77 and Kiwi Property Group was unchanged at $1.57.
A2 Milk Co posted the day's biggest decline, down 2.7 percent at $14.24 on a volume of 804,00 shares, in line with its
McIntyre said the benchmark held up well given A2's large weighting on the index. But he said the stock's been pushed
around in the past month on fears that China's desire for more locally produced formula may weigh on the company over
the next three-to-four years.
"The underlying story there hasn't gone away, it's just being buffeted by those factors," he said.
Synlait Milk, which supplies A2, rose 1 percent to $10.10. Fonterra Shareholders' Fund units declined 0.3 percent to
NZX was unchanged at $1.09 ahead of tomorrow's Cannasouth listing. The pre-revenue medicinal cannabis firm is the first
new listing in more than two years.
Vector's 2025 bonds, which pay annual interest of 3.45 percent, were the most traded debt security on a volume of
730,000. The notes closed at an unchanged yield of 3 percent.