Yovich & Co. Weekly Update - 3 June 2013
Jun 3, 2013 | Commentary
This Week's Themes
• The end of May brought with it the third consecutive week of negative returns on the NZX, although the speed of the correction is slowing. Reports out last week from the OECD and the BNZ Business Confidence survey show that the economy is well placed for growth and that confidence is at a record high since the survey began in 2005.
• The market across the Tasman continues to get hit by slower Chinese demand dragging down the mining sector and the index closed near a four month low.
• U.S. markets dipped late in the week as traders took profits after a strong month. The Dow finished the month up 2% and the NASDAQ up 4%.
• The Euro STOXX 600 index finished the month down, snapping a 12 month winning streak as markets start to price in slowing Government stimulus.
• The NZD continued the fall against the U.S. as The Reserve Bank Governor announced that the RBNZ would not rule out further currency intervention to devalue the Kiwi.
High Yielding Shares.
The Reserve Bank of New Zealand (RBNZ) has maintained a record low Official Cash Rate (OCR) of 2.5% since April 2009, except for a short term increase in 2010. Since then, the stock market has rallied with high yielding stocks being rewarded with share price appreciation as investors look for companies with strong cash flow and high dividend pay-out ratios. We still believe that chasing yield as a strategy makes a lot of sense, below are a few of the higher yielding stocks that we are advising clients on:
Shares Commentary Investments Weekly Update Market CNU.nz Chorus TEL.nz BRM.nz Telecom Barramundi Limited ARG.nz Argosy Property HNZ.nz Heartland New Zealand