MARKET CLOSE: NZ shares rise led by Meridian
MARKET CLOSE: NZ shares rise led by Meridian on political polls; Pacific Edge gains
By Suze Metherell
Sept. 5 (BusinessDesk) - New Zealand shares rose, led by Meridian Energy after political polls showed support for the incumbent National-led government ahead of this month's election. Pacific Edge advanced for a third day on news of its US patent.
The NZX 50 Index rose 25.319 points, or 0.5 percent, to 5253.868. Within the index, 29 stocks rose, 14 fell and seven were unchanged. Tunrover was $150 million.
Two political polls showed a firming in support for the National-led government returning for a third term led by Prime Minister John Key ahead of the general election on Sept. 20. Over the past three weeks an ongoing political scandal surrounding alleged 'dirty tricks' has distracted from the election, and seen the resignation of senior cabinet minister, Judith Collins. Energy stocks are the most prone to be sold ahead of any electoral uncertainty, as the opposition Green and Labour parties have promised to introduce a policy of KiwiPower, which includes a state-owned single electricity buyer in a bid to push down retail prices.
Electricity generators and retailers advanced on the pick up in the polls. Meridian Energy led the benchmark index higher, climbing 4 percent to $1.30. Genesis Energy advanced 2.2 percent to $1.84. MightyRiverPower increased 2.6 percent to $2.39. Contact Energy rose 2.2 percent to $5.57.
"Investors seem to be expecting a National victory with the way they've bought into gentailers," said James Smalley, director at Hamilton Hindin Greene. "It's purely off the back of those political polls that seem to indicate a strong likelihood of National getting re-elected, and with that the spectre of KiwiPower starting to recede a little bit."
Pacific Edge advanced, up 3.3 percent to 93 cents.The Dunedin-based biotech company is targeting the US market with its non-invasive bladder cancer test by securing healthcare provider trials, and announced it had secured a US patent for a skin cancer test today. Earlier in the year the stock touched a record of $1.76, before falling in a global sell-off of biotech and software stocks when investors questioned their high valuation to earnings ratio.
"They've come out with a couple of good announcements," Smalley said. "With these speculative stocks, where they're not generating any income now, it can be about momentum and perception - that perception has turned around and they've got a bit of upside momentum."
Spark New Zealand, formerly Telecom Corp, rose 1 percent to $3.07. Fletcher Building, New Zealand's largest listed company, rose 0.1 percent to $9.25.
A2 Milk Co rose 1.6 percent to 63 cents. ASX-listed Freedom Foods Group bought almost one million shares of A2 this week for about $589,000, and now has about a 17.9 percent stake in the milk marketer, after its stake was diluted in the past year due to the issue of partly-paid shares.
DNZ Property Fund, the country's sixth-biggest listed property investor by market value, rose 0.3 percent to $1.74. The company expects to pay a dividend of 9.5 cents per share in the 2015 financial year, up from 9 cents a year earlier, and expects that return to lift every year, chairman Tim Storey told shareholders in Auckland.
Outside the benchmark index, Horizon Energy was unchanged at $3.30 and has declined 1.5 percent this year. The Commerce Commission will cut the amount the lines company can earn in coming years by at least $727,934 as part of an out-of-court settlement after Horizon earned 3 percent more than its regulated pricing allows in 2012.
AWF Group jumped 6.9 percent to $2.65 after the contract labour firm said it anticipates first-half sales will grow almost 61 percent with the addition of white-collar recruitment firm Madison Group, and signalled bigger earnings as a result.