Free audio stream, including stories that are padlocked on our site. Listen on any device, anywhere. Updated twice daily. The audio stream takes several seconds to start on Android devices.Launch Radio player
BUSINESSDESK: New Zealand shares fell, led by Telecom, as investors looked for reasons to drive the market higher after offshore demand for dividend yields drove the NZX 50 Index to a five-year high this month.
The NZX 50 fell 32.48 points, or 0.8%, to 3951.29. Within the index, 29 stocks fell, 15 rose and six were unchanged. Turnover was a lower-than-average $66 million.
Telecom sank 3.5% to $2.38. At today's price it has a dividend yield of 12.1%, almost triple the 4.32% on an average one-year term deposit, according to interest.co.nz.
Faced with interest rates near record lows, investors have turned to the equity market for better returns, sending money into the best-yielding stocks.
Goodman Property Trust, up 0.5% to $1.06, has a dividend yield of 8%. Precinct Properties NZ rose 1.5% to $1.035 and has a dividend yield of 6.59%.
Kiwi Income Property Trust, up 0.4% to $1.175 for a dividend yield of 7.47%.
Offshore money and the general increase from KiwiSaver have helped push the NZX 50 above 4000 for the first time since early January 2008.
"We had a fairly good run and the market needs something to kick it along," says David Price, a broker at Forsyth Barr. "A lot of savers are being penalised with interest rates so low. What's driven the rally so hard has been yields."
Restaurant Brands rose 4.1%, leading the index higher. The company has a dividend yield of about 9.9%. Trade Me, the auction site that holds its annual meeting tomorrow, rose 1.6% to $4.45.
Among smaller caps, cashed-up department store operator Kirkcaldie & Stains soared 25% to $3.25 on speculation the company could return capital after selling a property worth more than its market capitalisation.
David Cushing, whose family owns almost 20% of the company, says the shares are worth even more.
Among the biggest stocks, Freightways fell 2.7% to $4.28, trimming this year's gain to about 20%. TrustPower fell about 2% to $8.55.
New Zealand Oil & Gas fell 1.7% to 85 cents. The company said today it farmed out a 25% stake in its Kaheru prospect off the South Taranaki coast to ASX-listed Beach Energy for $US3 million.
Fletcher Building fell 0.7% to $7.07 as the government unveiled a series of long-term measures to lift housing affordability including a review of supply-side construction costs.
Acurity Health Group was unchanged at $5.91 after it said chief executive Andrew Blair will step down as the head of the private hospital operator once-known as Wakefield Health after six years in the top job.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Treasury at odds with Reserve Bank over CGT
- Peter Jackson, Kim Dotcom, Cliff Curtis feature in latest batch of leaked Sony emails
- HBO sends cut-off threat to NZ, Aussie HBO NOW users
- RAW DATA: Lisa Owen interviews former Tony Blair spin doctor Alastair Campbell
- Capital gains taxes – time to revisit the Rob McLeod report?