MARKET CLOSE: NZX 50 rises to new record
MARKET CLOSE: NZX 50 rises to new record; MRP, Meridian, Contact gain on political polls
By Suze Metherell
March 18 (BusinessDesk) – The NZX 50 Index rose to a new record, following a global rally, paced by power companies after recent political polls put the government ahead, helping dispel fears the opposition parties will be able to overhaul the electricity sector. MightyRiverPower, Meridian Energy and Contact Energy rose.
The benchmark index rose 47.638 points, or 0.9 percent, to 5135.664. Within the index, 27 stocks rose, 12 fell and 11 were unchanged. Turnover was $167 million.
Better than expected US industrial production figures kicked off a global rally in equity markets which carried on into Asia. Hong Kong’s Hang Seng was up 0.5 percent in afternoon trading, Japan’s Nikkei 225 index advanced 1.4 percent and Australia’s S&P/ASX was up 0.5 percent.
Power companies paced today’s gains after a New Zealand Herald’s DigiPoll survey put the governing National Party at 50.8 percent support ahead of the September election. Labour, the main opposition party, garnered 29.5 percent. A key election policy of the opposition parties is to regulate the electricity market, creating a single state-owned wholesale electricity buyer.
MightyRiverPower, the government controlled energy company, climbed 3.2 percent to $2.07, while fellow partially privatised electricity provider Meridian advanced 1.9 percent to $1.095. Contact rose 0.6 percent to $5.25. Vector, the Auckland-based lines company, lifted 2 percent to $2.54.
“The electricity sector is up, and I’m going to put it down to the Herald DigiPoll results which were published, because they’re up across the board,” said Greg Easton, investment adviser at Craigs Investment Partners. “If there is no change in government, then that sector could really outperform after the election.”
Xero, the cloud-based accounting software developer, led the market higher, up 3.7 percent to $43.61. Fletcher Building, New Zealand’s largest listed company, advanced 1.5 percent to $9.74.
Chorus, which has dropped 41 percent over the past year, rose 1.8 percent to $1.71. The telecommunications network operator is appealing the Commerce Commission’s pricing of its copper lines, arguing that the modelling the regulator used was too narrow and ignored a section of legislation aiming to support the government’s goal in building a nationwide fibre network.
“They are still at half of where they were, but they have generated enough confidence in certain sectors of the market for people to be interested in it again,” Easton said.
Ryman Healthcare rose 1.8 percent to $8.60, and has advanced 81 percent in the past 12 months. The retirement village operator has plans for eight new sites following recent acquisitions to expand its land bank.
Telecom rose 1.4 percent to a 10-month high $2.515, before it sheds rights to its interim dividend tomorrow.
Auckland International Airport rose 0.8 percent to $3.95. Casino operator SkyCity Entertainment Group increased 1.5 percent to $3.96. Sky Network Television slipped 0.2 percent to $6.24.
Melbourne-based miner OceanaGold was the day’s worst performer dropping 4.6 percent to $3.10. Outdoor goods retailer Kathmandu Holdings declined 1.7 percent to $3.45, while Air New Zealand slipped 1.6 percent to $1.84.
Hallenstein Glasson fell 2.2 percent to $3.07 and has been the NZX 50’s worst performer this year, sliding 19 percent. This is the clothing chain’s last week in the benchmark index before it is replaced by Pacific Edge, whose shares have gained 17 percent in the same period. The bladder cancer test developer slipped 1.3 percent to $1.54.
NZX was unchanged at $1.26. The stock market operator is planning to introduce a new market for small to mid-size businesses with fewer disclosure requirements and more risk warnings for investors.