by BusinessDesk
The S&P/NZX 50 Index advanced 126.83 points, or 1.1 percent, to 11,259.41. Within the index, 28 stocks rose, 18 fell, and four were unchanged. Turnover was $163.6 million.
The Reserve Bank today kept the official cash rate at 0.25 percent and maintained the size of its quantitative easing programme at $60 billion, while noting that it may roll out more tools to support the economy. The central bank also tried to jawbone down the currency, saying it was elevated and weighing on export earnings.
The kiwi dollar gave up earlier gains, ending the local trading session largely unchanged at 64.60 US cents at 5pm in Wellington, and weaker against its trans-Tasman counterpart at 93.07 Australian cents.
Perpetually low interest rates have been a key driver in pushing share prices higher as investors seek income at a time when returns on term deposits barely keep up with inflation.
Matthew Goodson, managing director at Salt Funds Management, said the central bank's announcement was “no great surprise,” but was still driving demand among investors who are buying stocks irrespective of the price.
“Interest rates are incredibly low for a reason,” Goodson said. “But certainly, they have pushed people into the equity market.”
“Valuation multiples are at never-before-seen levels and the risks as to whether a company can deliver that top line revenue and earnings are certainly still there.”
Stride Property led the market higher, gaining 8.3 percent at $1.82. The property investor yesterday said it plans to maintain its dividend payments, and Jarden research analysts upgraded their rating on the stock to 'outperform' with a target price of $2.07.
“Stride is really standing out in the property space,” Goodson said. “It was up a little yesterday following the result, but a couple of analyst upgrades seem to have sparked a lot of retail investor buying in the name.”
Among other yields stocks, Argosy Property rose 2.1 percent to $1.195, and Spark New Zealand advanced 3 percent to $4.57.
Ryman Healthcare rose 5.1 percent to $13.39, recovering from a decline yesterday. Goodson said there had been a spate of new covid-19 infections in the Australian state of Victoria, where Ryman owns a number of properties.
Pushpay rose 5 percent to $9.30, having more than doubled so far this year. The mobile payments company generates most of its revenue in US dollars, and benefits from a weaker NZ dollar.
“Pushpay has been run up sharply as aggressive small cap managers chase it; now it has a remarkable market cap of almost $2.6 billion,” Goodson said.
Other exporters to gain today included Fisher & Paykel Healthcare, which was up 2.6 percent at $31.05, and A2 Milk, rising 1.8 percent to $19.40.
Goodson said travel-related stocks continued to decline due to the revival of covid-related fears and low expectations for a trans-Tasman bubble being opened any time soon.
Air New Zealand fell 3.1 percent to $1.40, the day’s biggest fall, Auckland International Airport declined 1.2 percent to $6.37 and Tourism Holdings dropped 1 percent to $1.92.
Source: Good Returns
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