ETF Trends
ETF Trends

The S&P/NZX 50 reached record high levels in October after the market’s best rally since the global financial crisis, sending the iShares MSCI New Zealand Capped ETF (NYSEarca: ENZL) on a surge.

The National Business Review reported that the rally comes after an absolute beating in its worst quarter ending September since 2012. The NZX dropped 3.5% in September to 5593.36, the lowest level since the start of 2015.

All of those losses were erased last month as stocks around the globe rallied. Grant Williamson told Business Desk, “The benchmark index advanced 7% in October, touching an intraday high of 6014.48 on October 27 and closing at a record 6002.97 last Thursday. Last month’s climb is the biggest since July 2009, when the NZX 50 rose 7.9% during the volatile trading of the global financial crisis”.

What’s behind the gains? It’s difficult to pinpoint as the rally was broad-based with 45 of the stocks picking up, four going down, and one going sideways. Brian Gaynor, executive director at Milford Asset Management, told NBR, “When there is no negative news people look at the share market, and our share market has got the highest dividend share of anywhere in the world. We had a month in October where the news was, I’m not saying it was good, but there wasn’t any bad news – it was devoid of bad news in the month.”

ENZL was able to reverse its long skid to and gained 13.87% in October. The rally wasn’t nearly has endured a rough year overall though, still having lost 8.30% since the beginning of the year. The more encouraging news comes from the longer term trend lines. ENZL shot above its 50-dayMA way back on October 7th and even passed its 200-dayMA on the 27th. It gave back enough by the end of the month to dip below, but had pushed back towards it by the end of day Monday, resting at $36.37, just below its 200-MA of $36.47.