MARKET CLOSE: Shares rise; Meridian, Genesis gain on yield appetite

New Zealand shares rose, paced by Meridian Energy and Contact Energy as investors' appetite for income paying equities returned. Warehouse Group advanced after it reported an increase in third-quarter sales.

The NZX 50 Index rose 6.002 points, or 0.1 percent, to 5735.355. Within the index, 21 stocks rose, 19 fell and 10 were unchanged. Turnover was $86 million.

Dividend-paying stocks rose as investors considered the possibility the Reserve Bank of New Zealand may lower the official cash rate after employment figures earlier this week showed slowing wage growth in the first three months of the year. Meanwhile across the Tasman the Reserve Bank of Australia cut interest rates to 2 percent, making the gap between Australia and New Zealand's interest rate 1.5 percent, fuelling speculation the local central bank will follow suit.

Energy generators and retailers held for the relatively high dividend yield advanced. Meridian climbed 1.5 percent to $2.40. Genesis Energy gained 0.8 percent to $1.92. MightyRiverPower increased 0.2 percent to $2.885. Contact Energy rose 0.7 percent to $5.56.

"The overriding macro theme going on in the market is where people are looking at interest rates again with a view that potentially the next move from the Reserve Bank could actually be down," said Bryon Burke, head of equities at Craigs Investment Partners. "With that view in the mind then it's going to add support to all the yielding stocks."

Property investors also held for their reliable yield rose. Property For Industry gained 0.6 percent to $1.58. Precinct Properties New Zealand advanced 0.4 percent to $1.145.

Warehouse Group increased 1.5 percent to $2.78. New Zealand's largest publicly listed retailer posted a 5 percent gain in third-quarter sales to $635.1 million, which it said was in line with its expectations and meant it was on track to meet its forecast annual profit.

Kathmandu Holdings, the outdoor goods retailer, rose 1.4 percent to $1.42. Restaurant Brands New Zealand, the fast-food chain operator, gained 1.5 percent to $4.20. Retailers outside the benchmark index were mixed with Briscoe Group, the homewares and sports retailer, unchanged at $2.85 while Hallenstein Glasson, the fast-fashion retailer, rose 1.1 percent to $3.57.

Spark New Zealand, formerly Telecom Corp, fell 1 percent to $2.85. Fletcher Building, the construction and building supplies firm, rose 1.3 percent to $8.49.

Outside the benchmark index, SeaDragon, which manufactures fish oil for health supplements, jumped 25 percent to 2 cents after it named Tetra Laval executive Colin Groves as chairman, replacing Doug Wilson, who announced his departure along with chief executive Ross Keeley this week.

(BusinessDesk)