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Investors Thrive As New Zealand Shares Increase

Paul Martin • Oct 21, 2015

New Zealand Shares IncreaseLed by A2 Milk Co, the New Zealand share market rose after $40 million was raised in a share placement. It jumped to 78 cents to aid the funding for the development of its infant formula products. According to the Grant Williamson, Director at Hamilton Hindin Greene, there are some disappointed investors who were not able to join or got scaled since the placement got away very easily.

The energy companies which include Contact Energy, Meridian Energy and Mighty River Power (MRP) advanced too. Williamson said that the demand for electricity generators has certainly come in again and he thought that investors are going to chase yields . Contact Energy rose by 1.3 percent while Meridian rose by 0.5 percent and MRP went higher by 0.4 percent.

Companies which are paying higher dividends but at a low interest rate make it more attractive and the yield stocks grow in the local trade. 

When the United States Federal Reserve announced that they were going to increase interest rates after running a near zero policy because of the financial crisis, traders pushed out their expectations. Some investors are attracted to low interest companies and yield stocks rather than higher interest rate companies. But the US share market rose again when the investors decided that the US Fed will not move interest rates anytime soon which makes the equity market underpinned, according to Williamson.

Markets across Asia followed the Wall Street higher .

The S&P/NZX 50 index climbed by 0.2 percent. There were 23 stocks that climbed up the ladder while 19 went down and 8 remained the same. The turnover was $190 million.

Breathing apparatus manufacturer and exporter Fisher and Paykel Healthcare went down by 0.9 percent whereas an outdoor goods retail chain store moved down by 2.7 percent.

The greenback is up against the Kiwi Dollar which is heading to rise by 3.7 percent this week. The stronger currency weighs on the foreign earnings of exporters.

Spark New Zealand climbed by 1.8 percent while Fletcher Building, a supply firm for construction and building, rose by 1.3 percent.

However, the cloud-based accounting software company Xero went down the benchmark index by 3 percent. Xero is an accounting software for small business which stores data via cloud or the internet.

Even if there are low performers on the market at the present, it won't stay that way since investors are always looking for new markets which they think are improving. There are things that need consideration to gain market share like the US Federal Reserve. If they take the interest higher, they might lose some of their former investors who will move to low interest and yield stocks. There are investors who are considered bargain hunters who will invest in yield stocks. You may contact us or request an appointment online for more business insights and strategies.

References:
Metherell, S. (2015, October 9). MARKET CLOSE: NZ shares rise, led by A2 after $40M placement. Retrieved October 9, 2015, from http://www.scoop.co.nz/stories/BU1510/S00332/market-close-nz-shares-rise-led-by-a2-after-40m-placement.htm

How the new Government and coalition agreements might affect owners of residential rental properties

By Paul Martin • 04 Dec, 2023
There were some key takeouts of interest to many of our clients from the recently signed coalition agreements between National, ACT and New Zealand First and the formation of the new Government. In particular there are a number of policies which will likely benefit landlord clients who own residential rentals. I have summarised some of these below. 1. Return of Interest deductibility for residential rental properties Interest deductibility for residential rental property owners will return. It will be phased back in over three tax years: • 2023/24 tax year: 60% of interest cost will be deductible. • 2024/25 tax year: 80% of interest cost will be deductible. • 2025/26 tax year: 100% of interest cost will be deductible. 2. Reduction in bright-line period National signalled in their pre-election campaign that the bright-line period for residential rental property sales would reduce from 10-years to 2-years. While the exact implementation of this policy is not yet known, it is good news on the horizon for residential property investors. 3. Reinstatement of 90-day no-cause termination notices The new government will reinstate 90-day no-cause tenancy termination notices. This will avoid many unnecessary disputes in the Tenancy Tribunal and gives landlords more confidence in letting to possibly “marginal tenants". Many landlords have avoided what they considered to be risky tenants because eviction for anti-social behaviour was so difficult. With this reinstatement, landlords might be more inclined to give a marginal tenant a chance because they know that if the tenant misbehaves, they won’t be stuck with them. If you would like more information on how these changes might affect your personal circumstances, please feel free to contact us to discuss further.

How does provisional tax work, especially in an economic downturn?

By Paul Martin • 18 Jul, 2023
If you had to pay tax of more than $5,000 in your last income tax return, you may have to pay provisional tax for the following year. Provisional tax is like making progress payments on next year's income tax.

How to handle inflation as a sole trader

By Paul Martin • 18 Jul, 2023
Sole traders have had an especially difficult few years as inflation surges. We have got three tips to help lighten the load for your sole trader business. 
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