NZX 50 hits 7-mth high, Warehouse rises

BUSINESSDESK: New Zealand shares rose, pushing the NZX 50 Index to a seven-month high, as signs global growth may be more resilient than feared lifted equity markets. Warehouse Group rose ahead of its interim results tomorrow.

The NZX 50 climbed 10.73 points, or 0.3 percent, to 3413.78. Within the index, 27 stocks rose, 15 fell and eight were unchanged. Turnover was $111.5 million.

Stock markets rallied across Asia, with Japan’s Nikkei 225 Index gaining 1.5 percent after the government revised down its estimate for economic contraction in the fourth quarter to an annualised 0.7 percent from 2.3 percent.

That added to a return in positive sentiment as private holders of Greek bonds increased their participation to debt swap and US figures showed the private sector added 216,000 jobs last month. At home, Reserve Bank Governor Alan Bollard kept the official cash rate at a record low 2.5 percent, saying a strong currency was helping keep a lid on inflation.

Guinness Peat Group, the investment company in wind-down mode, led gainers, climbing 4.1 percent to 51 cents.

Michael Hill International, the jewellery retailer, rose 3.9 percent to $1.06.

Warehouse Group, the biggest retailer on the exchange, gained 3.1 percent to $2.65 ahead of its first-half results due out tomorrow. The shares have a dividend yield of 12.9 percent, based on the company’s last 12 months of payments.

Second-quarter sales rose 4.2% while same-store sales gained 3.1%, Warehouse said last month, while affirming its full-year net profit forecast of $80 million.

"People are probably looking at the dividend," said Rickey Ward, domestic equities manager at Tyndall Investment Management. “I don't think anyone is expecting miracles" from the results.

Ward said investor appetite for stock dividends has been driving demand in the market, including for Telecom, which rose 0.4 percent to $2.33, the highest since it spun off its Chorus network business.

"Telecom seems to have the ear of investors in the global context – it’s the healthy dividends," he said.

Among other retailers, children’s clothing chain Pumpkin Patch fell 1.2 percent to 83 cents and Restaurant Brands declined 0.5 percent to $1.91.

Fisher & Paykel Appliances rose 3.6 percent to 43 cents amid optimism reviving growth in the US and spending in Christchurch will lift demand for its home appliances.

"It is up on a recovery story out of the US.” Ward said. “There is a definite improvement in that country and the Christchurch domestic situation should benefit the company."

Fletcher Building, the nation’s biggest construction company, slipped 0.6 percent to $6.60.