New Zealand shares have made strong gains after Wednesday’s selling, with Metro Performance Glass leading the index up while Contact Energy went ex-dividend.
The S&P/NZX 50 Index rose 36.86 points, or 0.5%, to 7775.2. Within the index, 33 stocks rose, 11 fell and six were unchanged. Turnover was $122 million.
"The market has rebounded a little after yesterday's risk-off-the-table event with North Korea, we've seen it gradually get stronger during the day," said Peter McIntyre, investment adviser at Craigs Investment Partners.
"It's a market that is quite fully valued and reliant on earnings continuing to hold values up. A number of stocks are trading cum dividend, we're going to get days when geopolitical tensions override everything and a flight to safety into cash or gold.
"We have got a lot of companies set to pay reasonable dividends, and that attracts a lot of investors, so I think that's going to support the market."
Metro Performance Glass was the best performer, rising 3.8% to $1.09. It had been sold down heavily since its result.
"It does reach a position where investors see some value in it, or see it as being oversold," McIntyre said. "It's not like Metro Glass hasn't got a bit of work in front of it, it's a wee bit like Fletcher Building, investors do see some value in it."
Spark New Zealand gained 1.6% to $3.89. The telco advanced from today's broadband statement, as its joint bid with Vodafone and 2degrees was awarded the $150m tender to expand rural broadband and provide coverage for dark spots in tourist locations and along the state highway network.
Chorus was unchanged at $4.05. It said it would deliver ultrafast broadband to 87% of the country by 2022, two years ahead of schedule, and expand its fibre rollout to 54,500 "rural premises" with a total cost of $130m from a deal with Crown Fibre Holdings. At the moment, around 60% of the country have access to fibre, the government says.
The agreement will increase Chorus' peak leverage in the medium term, meaning it will underwrite its final dividend for the 2017 fiscal year. Crown Fibre Holdings is funding the programme through $240m in recycled capital from earlier stages of the UFB programme and $30m from the telecommunications development levy.
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