MARKET CLOSE: Shares gain, bolstered by dividend-paying property stocks; Auckland Airport rises

New Zealand shares rose as investors shrugged off the prospect of higher global interest rates, and bought property stocks, including Argosy Property and Property For Industry, and blue-chip companies such as Auckland International Airport that typically offer high dividends.

The NZX 50 Index gained 17.913 points, or 0.3 percent, to 5885.81, the highest close since March 18. Within the index, 26 stocks increased, 18 fell and six were unchanged. Turnover was a lighter-than-usual $71.7 million with Australian markets closed for the Queen's Birthday holiday.

Global investors are expecting the Federal Reserve will start raising interest rates in September after US non-farm payrolls showed the world's biggest economy added 280,000 jobs last month, a bigger gain than expected. Stocks on Wall Street fell as the prospect of US interest rates moving away from zero pushed up bond yields.

Listed property companies paced the benchmark index's gains with Property For Industry advancing 2 percent to $1.56. Argosy Property rose 0.9 percent to $1.13 and Vital Healthcare Property Trust gained 0.6 percent to $1.66. Auckland Airport climbed 1.6 percent to $5.01. Spark New Zealand increased 0.7 percent to $2.91 and Fletcher Building advanced 0.7 percent to $8.50.

"The market is expensive on most traditional metrics, but compared to bond yields, it has been fairer value," said Matt Goodson, who helps manage $700 million of Australasian equities at Salt Funds Management. "The only risk with that is that bond yields are low, inflation is really low, so are you going to get the same earnings growth you're used to? Possibly not."

Goodson said US data may signal a change in that long-running global theme with the Fed on the cusp of potential tightening.

National carrier Air New Zealand led the index higher, rising 2.1 percent to $2.86.

Contact Energy was the biggest decliner on the day, falling 8.4 percent, or 51 cents, to $5.57, after shedding rights to a 50 cents per share special dividend to be paid on June 23.

Pacific Edge, the cancer diagnostics test developer, fell 3.1 percent to 62 cents, still a premium to the 61 cents per share price the company plans to sell shares at in a $35.3 million capital raising which opens on Friday.

Goodman Property Trust was unchanged at $1.17 after the property investor announced plans for four new industrial developments were in the pipeline, and launched a $100 million bond offer.

Outside the benchmark index, Scales Corp rose 0.6 percent to $1.74 after the horticulture exporter told shareholders at its annual meeting its expects earnings to meet prospectus guidance.

Children's clothing retailer Pumpkin Patch slumped 12 percent to 22 cents, extending a decline from Friday when it abandoned plans to refinance or find a buyer, and said it will focus on improving its ailing business.

Green Cross Health, formerly known as PharmacyBrands, was unchanged at $2.50 after shedding rights to a 3.5 cents per share dividend, payable on June 19.

Synlait Milk fell 2.9 percent to $2.65 after the dairy products processor cut 10 cents from the forecast milk payout this season, and said it expects to pay $5.50 per kilogram of milk solids in 2016. Units in the Fonterra Shareholders' Fund slipped 0.6 percent to $4.72, while A2 Milk Co was unchanged at 56 cents.

(BusinessDesk)