MARKET CLOSE: NZ shares gain as yields appeal - Cavalier up

BUSINESSDESK: New Zealand shares rose as investors were lured to companies offering relatively appealing dividend yields and the local bourse took heart from gains on Wall Street. 

Cavalier and Property for Industry were among gainers.

The NZX 50 Index rose 7.04 points, or 0.2%, to 3480.54. Within the index, 28 stocks rose, 12 fell and 10 were unchanged.

Turnover was about $105 million, with almost half of that made up of Fletcher Building and Telecom.

Cavalier, the carpet maker and wool handler trying to build a monopoly in wool scouring, rose about 1% to $2.07.

The stock has a dividend yield of 10.9%, almost three times the yield on 10-year government bonds.

Property for Industry, which invests in industrial property, rose 1.3% to $1.16. It has a dividend yield of about 8.2%.

"The New Zealand market does offer an attractive yield and that has been attracting local and offshore investors," said Craig Brown, senior investment analyst at One Path New Zealand.

Equity markets are still very much driven by global events such as concerns over Spain's rising debt costs, he said.

"Spain is still hanging over us like a black cloud." Still, the US and European markets "finished positive last night and that gave us a good lead".

Diligent Board Member Services, which provides software for company directors, climbed 5.4% to a record high close of $3.69 after reporting record sales growth for the March quarter and its third successive operating profit.

First quarter sales of %US8.2 million compared to $US3m in the same three months of 2011 and nearly equal to its revenue for all of calendar 2010.

It compares to $US6.5m in the December quarter.

Fisher & Paykel Appliances rose 5.7% to 55 cents as the kiwi dollar fell below 82 US cents.

The manufacturer benefits from a weaker currency when it repatriates export sales.

Fisher & Paykel Healthcare, which gets more than 50% of its revenue in US dollars, rose 0.5% to $2.15.

Kathmandu, the outdoor equipment retailer, rose 3% to $$1.65, having shed about 8% this year.

Chorus, the network company spun off from Telecom in November, rose 1.8% to $3.42. Telecom slipped 1.8% to $2.48.

Fletcher Building, the nation's biggest construction company, rose 0.8% to $6.26.

Steel & Tube Holdings, which supplies steel building products for the construction industry, rose 2.2% to $2.35.

Heartland New Zealand, the building society with ambitions to become a bank, climbed 7.6% to 57 cents, leading the NZX 50 higher.

OceanaGold, which operates the Macraes gold field, fell 3.3% to $2.95.

Spot gold fell for a third straight session in Asia, to reach $US1649.70 an ounce.