New Zealand shares rose, paced by Contact Energy and Genesis Energy after high-dividend paying stocks were made more attractive by the prospect of low interest rates staying in place for at least the next two years. Metro Performance Glass gained.
The NZX 50 Index rose 24.801 points, or 0.4 percent, to 5886.783. Within the index, 27 stocks rose, 12 fell and 11 were unchanged. Turnover was $129 million.
The benchmark index snapped three declines after Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and dropped future increases from the forecast track of the 90-day bank bill rate, which is seen as a proxy for the key rate. That stoked demand for income paying equities, such as utilities, property investors and telecommunication companies.
Contact advanced 2.6 percent to $6.32. Genesis rose 1.3 percent to $2.31. DNZ Property Fund climbed 0.5 percent to $1.92. Spark New Zealand, formerly Telecom Corp, increased 0.5 percent to $3.195. Kiwi Property Group rose 1.6 percent to $1.29. Precinct Properties New Zealand increased 0.9 percent to $1.18.
"Most people were expecting the Reserve Bank to be firmly on hold for some time," Mark Lister, head of private wealth research at Craigs Investment Partners said. "Those high yield stocks will remain in vogue for some time."
Offshore markets helped push up the local market, Lister said. Australia's S&P/ASX 200 Index rose 0.9 percent in afternoon trading, Japan's Nikkei 225 Index increased 1.3 percent.
Metro Performance Glass rose 1.8 percent to $1.73, recovering from some selling pressure in recent days, Lister said.
Ebos Group, the animal care and healthcare products manufacturer, led the benchmark index higher rising 3.1 percent to $10.85.
Restaurant Brand advanced 2.1 percent to $3.97. Yesterday, New Zealand's largest fast food chain, which also operates Carl's Jr, Starbucks, Pizza Hut and KFC, said fourth quarter sales rose 19 percent to $92.8 million in the 13 weeks ended March 2.
Warehouse Group was the worst performer on the benchmark index today, dropping 1.7 percent to $2.86. Last week New Zealand's largest listed retailer lowered its forecasts for annual profit and dividend payments.
Sky Network Television, the country's dominant pay-TV provider, increased 1.6 percent to $5.73. Fletcher Building, the building supplies and construction firm, rose 0.7 percent to $8.84.
New Zealand Oil and Gas fell 1.7 percent to 58 cents. The exploration company will exit the benchmark index on March 23, to be replaced by Orion Healthcare Group. The healthcare software firm rose 2 percent to $5.27.