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NZX 50 tops 8000 for first time

Author
SCOOP - Jonathan Underhill,
Publish Date
Mon, 9 Oct 2017, 4:45PM
(Photo / File)
(Photo / File)

NZX 50 tops 8000 for first time

Author
SCOOP - Jonathan Underhill,
Publish Date
Mon, 9 Oct 2017, 4:45PM

New Zealand's stock exchange has topped 8000 for the first time as low interest rates and a stable economic outlook bring healthy returns for major companies.

The NZX50 rose 0.5 per cent to 8016.89 and on Monday touched a record high of 8017.44, bringing its gain this year to about 16 per cent.

That would mark the fifth straight year of 10 per cent gains.

The gains have been driven primarily by dairy products and tourism.

A2 Milk is up 236 per cent for the year and its manufacturing partner Synlait Milk has climbed 116 per cent.

Air New Zealand shares, meanwhile, have advanced 57 per cent and campervan hire company Tourism Holdings has gained 33 per cent.

Online accounting firm Xero has resumed its place as a stand-out performer, rising 80 per cent, while Fisher & Paykel Healthcare, with access to the US market for healthcare products, is up 48 per cent.

"There's only one asset class that gives you a return and that's the share market," says Tim Kronfeld, senior dealer at OMF.

Ryman, the retirement village operator, has gained 19 per cent this year and Freightways is up 13 per cent.

Companies on the NZX50 are trading at a weighted average price-to-earnings ratio of 19.9 per cent and have a weighted average gross yield of 5.5 per cent, according to Forsyth Barr.

A one-year term deposit is currently offering 3.31 per cent, according to the interest.co.nz web site.

KiwiSaver assets topped $40 billion this year as more New Zealanders save for their retirement.

Fletcher Building, however, is struggling, down 27 per cent for the year, amid problems with major contracts in its construction division and the decision to dump its chief executive.

Sky Network Television, which missed out on a merger with Vodafone and faces new competitors in the streaming content market, is down 37 per cent.

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