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MARKET CLOSE: NZX 50 rises to a record; MRP, Meridian gain

MARKET CLOSE: NZX 50 rises to a record; MRP, Meridian, Genesis climb

By Suze Metherell

Jan. 23 (BusinessDesk) - New Zealand shares rose in a global rally, paced by Genesis Energy, Meridian Energy and MightyRiverPower, as investors sought income-paying investments in a globally low interest rate environment.

The NZX 50 Index rose 28.093 points, or 0.5 percent, to 5675.238, having risen as much as 1.2 percent to an intraday record of 5712.661. Within the index, 30 stocks rose, 12 fell and eight were unchanged. Turnover was $112 million.

Overnight the European Central Bank confirmed it will launch a bigger-than-expected 60 billion euro a month bond purchase programme to stimulate the region's economy and boost inflation, which will increase the supply of money in the global financial system, of which some will find its way into equity markets. Investors bought dividend paying stocks on anticipation global interest rates will be lower for longer. Markets across Asia advanced with Japan's Nikkei 225 Index climbing 1 percent, while Australia's S&P/ASX 200 Index gained 1.2 percent in afternoon trading.

"The ECB puts an impetus into markets, in terms of delivering quantitative easing and keeping yields a lot lower for longer, so other risk assets are being sought after," said Craig Stent, director at Harbour Asset Management. "You can borrow globally for a lot cheaper and invest in other markets."

Yield stocks paced the benchmark index's gains. MightyRiverPower climbed 2.7 percent to $3.42. Genesis Energy advanced 2.6 percent to $2.20. Meridian Energy gained 0.5 percent to $2.01. Spark New Zealand, formerly Telecom Corp, rose 0.5 percent to $3.23. Contact Energy increased 1.5 percent to $6.75.

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The NZX 50 Index has advanced 2.5 percent since the start of the year and pushed valuations to their upper levels, Stent said. Investors have been attracted to the good outlook for the New Zealand-based companies where exporters benefit from a weaker kiwi dollar, while domestic economic growth looks positive and interest rates are likely to remain static.

Metro Performance Glass, New Zealand's largest glass manufacturer, led the benchmark index higher, climbing 3.2 percent to $1.93. Xero, the cloud-based accounting software firm, gained 1.6 percent to $16.26. Fisher & Paykel Healthcare, the breathing apparatus manufacturer and exporter, rose 2.4 percent to $6.08. Fletcher Building, the construction and building supplies firm, advanced 0.5 percent to $8.31.

Of the day's few decliners, Pacific Edge, the biotech company, was the worst performer on the benchmark index dropping 5 percent to 76 cents. Nuplex Industries, the resin and specialty chemicals business, declined 2 percent to $3.02. Ryman Healthcare, the retirement village operator, slipped 1 percent to $8.12.

Kathmandu Holdings rose 0.5 percent to $2.01. The Christchurch-based outdoor goods retailer appointed Xavier Simonet as its new chief executive who will relocate from London to Melbourne to take up the role.

Outside the benchmark index, TeamTalk, the listed telecommunications firm, plunged 32 percent to $1.15 after it revised down first half earnings expectations to $6 million, below the $7.7 million it achieved a year earlier, forcing an early refinancing of its debt facility.

On the New Zealand Alternative Index, Windflow Technology was unchanged at 6 cents after the unprofitable wind turbine manufacturer said it will sack staff to reduce costs in the face of slow planning and production in the UK and weak demand in the New Zealand market.

(BusinessDesk)

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