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MARKET CLOSE: NZX 50 reaches record on ‘safe-haven’ appeal

MARKET CLOSE: NZX 50 reaches new record on ‘safe-haven’ appeal; MRP, Contact gain

By Suze Metherell

March 19 (BusinessDesk) – New Zealand’s NZX 50 Index rose to a record as economic growth, the prospect of political stability and distance from geo-political tensions in Europe lured investors. MightyRiverPower, Meridian Energy and Contact Energy rose.

The NZX 50 rose 19.051 points, or about 0.4 percent, to a record 5154.715. Within the index, 26 stocks rose, 15 fell and nine were unchanged. Turnover was $135 million.

Russia cemented its claim to Ukraine’s breakaway peninsula Crimea as Western countries warned of sanctions, stoking concern regional tensions may rise. Meanwhile the NZ Herald’s DigiPoll survey projected a third term for the governing National Party as the domestic economy picks up pace.

Contact climbed 2.1 percent to $5.36. Government-controlled MightyRiverPower advanced 1.5 percent to $2.10, while Meridian rose 1.4 percent to $1.11.

“New Zealand is viewed as a safe haven - obviously the economic conditions are pretty supportive here at the moment with GDP going to be over 4 percent this year,” said Craig Stent, an analyst with Harbour Asset Management. “The polls that came out yesterday indicating potentially that National might be able to govern alone or with a coalition partners again is why you’ve seen a bounce back in the utility stocks.”

A key election policy of the opposition parties, Labour and the Greens, is to regulate the electricity market, creating a single state-owned wholesale electricity buyer, which would force down prices.

Online auction website Trade Me Group led the index higher, up 2.7 percent to $3.83. Fonterra Shareholders’ Fund, which gives investors access to Fonterra Cooperative Group’s dividend stream, gained 2.5 percent to $6.10. Brisbane-based jeweller Michael Hill International climbed 2.2 percent to $1.40.

Telecom was the day’s worst performer, dropping 3.8 percent to $2.42. New Zealand’s largest telecommunications provider shed rights to its interim dividend today.

Diligent Board Member Services declined 2 percent to $4.36. The company, which had to restate several years of financial statements after recognising revenue too early, said it will miss the March 31 deadline to file its annual report.

Xero, cloud-based accounting software firm, rose 1.9 percent to $44.45. Fletcher Building, New Zealand’s largest listed company was unchanged at $9.74. Auckland International Airport declined 1.3 percent to $3.90.

Outdoor goods retailer Kathmandu Holdings fell 2 percent to $3.38, Warehouse Group, New Zealand’s largest listed retailer was unchanged at $3.26. Clothing chain Hallenstein Glassons lifted 0.3 percent to $3.08.

Outside the benchmark index, children’s clothing retailer Pumpkin Patch plunged 19 percent to a record low of 55 cents. The retailer reported a 98 percent decline in first-half earnings as declining sales in its largest market Australia were further impacted by a strong kiwi. It warned of continuing currency headwinds in its second-half.

(BusinessDesk)

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