MARKET CLOSE: NZ shares join global rally; Trade Me, Kiwi Property advance

Friday 9th January 2015

New Zealand shares rose, paced by Trade Me Group and Kiwi Property Group, joining a global rally on speculation US interest rates will remain low. Construction companies Fletcher Building and Steel & Tube Holdings gained on a rise in local and Australian building consent approvals.

The NZX 50 Index rose 10.789 points, or 0.2 percent, to 5584.841. Within the index, 20 stocks rose, 15 fell and 15 were unchanged. Turnover was $83 million.

Overnight Wall Street rallied after minutes of the US Federal Open Market Committee meeting indicated the central bank would hold off embarking on the normalisation path, and raise interest rates "for at least the next couple of meetings”. The prospect of low interest rates for longer in the world's biggest economy helped lift equity markets across Asia as investors sought higher returns from shares. Australia's ASX/S&P 200 Index rose 1.4 percent in afternoon trading, South Korea's Kospi 200 Index was up 1.2 percent and Japan's Nikkei 225 Index gained 0.5 percent.

Kiwi Property Group climbed 3.1 percent to $1.32. Trade Me, the online auction site, advanced 3 percent to $3.73. Summerset Group Holdings rose 2.5 percent to $2.87. Diligent Board Member Services gained 2.2 percent to $5.48.

"We're led by offshore, but we're underperforming," given the benchmark index gained 18 percent in 2014, said James Lindsay, who helps manage about $400 million in equities for Nikko Asset Management. "The Fed minutes came out, which didn't give an immediate chance of rate rises in the US and it means the yield support story lasts a little longer, as we've got very low interest rates around the world."

Construction companies gained after New Zealand's residential building consents rose to a seven-year high in November, according to Statistics New Zealand, while Australian data out yesterday showed building approvals climbed in a record across the Tasman in the same month. Fletcher advanced 1.1 percent to $8.21. Steel & Tube rose 2.1 percent to $2.92.

A2 Milk Co led the benchmark index higher up 3.6 percent to 58 cents. The company, which markets milk with a protein variant said to have health benefits, called a special meeting to change its constitution to shrink the number of New Zealand-based directors required and allow for a bigger board as it gears up for a dual-listing on the Australian stock market.

Outside the benchmark index, Michael Hill International rose 2.6 percent to $1.18 after the Brisbane-based jeweller lifted first-half sales 3.9 percent to A$279.3 million, as growth in its target North American market offset a weak Australian trading environment.

"It was a little mixed but in line with expectations," Lindsay said. "Aussie continuing to be under pressure should be no real news to anyone."

BusinessDesk.co.nz

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