Kennedy, the 2011 New Zealand Open champion, is currently two-under par today to move to 18-under for the tournament through nine holes at Millbrook Resort today.
Kiwi Ben Campbell has mixed two birdies with one dropped shot, to remain second on 16-under.
The move has come from Australian James Nitties, who is three-under par today through nine holes, to move to 14-under. He shares third place currently with 2014 New Zealand Open champion Dimitrios Papadatos (AUS) and 19-year-old Korean Sung-Jae Im, both two-under today.
However Kiwi Michael Hendry has eased back to a share of sixth place, mixing three birdies with a bogey and a double bogey in his first nine.
He shares sixth with compatriot Ryan Fox, with his eight-under par 63, and Australian Jack Wilson.
Conditions remain clear but cooler in Queenstown today with some rain forecast for tomorrow.