Market close: Shares fall as yield story runs out of puff, Telecom drops

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

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.

Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

Comments & Questions

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot


Sym Price Change
USD 0.6552 0.0010 0.15%
AUD 0.9142 0.0005 0.05%
EUR 0.5816 0.0008 0.14%
GBP 0.4301 0.0004 0.09%
HKD 5.0782 0.0076 0.15%
JPY 78.8060 0.1340 0.17%


Commodity Price Change Time
Gold Index 1147.0 11.620 2015-10-06T00:
Oil Brent 52.5 2.580 2015-10-06T00:
Oil Nymex 49.0 2.270 2015-10-06T00:
Silver Index 16.0 0.280 2015-10-06T00:


Symbol Open High Last %
NZX 50 5668.1 5677.9 5668.1 -0.07%
NASDAQ 4767.6 4783.4 4781.3 -0.69%
DAX 9804.4 9957.9 9814.8 0.90%
DJI 16774.0 16865.1 16776.4 0.08%
FTSE 6298.9 6343.7 6298.9 0.43%
HKSE 21884.7 22012.9 21831.6 0.81%
NI225 18168.2 18213.7 18186.1 -0.22%