Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


MARKET CLOSE: NZ stocks rise; Meridian, MRP up on Tiwai

MARKET CLOSE: NZ stocks rise; Meridian, MRP up ahead of Tiwai Pt decision

By Fiona Rotherham

July 31 (BusinessDesk) - New Zealand shares rose. Meridian Energy and MightyRiverPower gained ahead of a decision on the future of the Tiwai Point aluminium smelter and as investors sought companies with relatively strong dividend yields.

The S&P/NZX 50 index rose 29.1 points, or 0.5 percent, to 5,920.95. Within the index, 26 stock rose, 15 fell and 9 were unchanged. Turnover was $121 million.

Meridian was up 3 percent to $2.25 ahead of Rio Tinto-owned New Zealand Aluminium Smelter making a delayed decision on Monday whether to end its power contract for the Tiwai Point smelter. As part of the $30 million government grant it received to stay open two years ago, NZAS was given until now to decide on its future and that of its 800 workers. The market seems optimistic that Tiwai still stay open and that Meridian will be able to easily on-sell an extra 172 megawatts that will become available from the 572 megawatts the smelter takes or face higher prices, which was a condition of the 2013 deal.

“A lot of investors are keen to see what happens” with the contract, said Grant Williamson, a director with Hamilton, Hindin, Greene.

A major mover on the market today was Scales Corp, New Zealand’s biggest apple exporter, following a market update. The company’s share rose to a record $2.04 after it said its Mr Apple unit had nearly completed packing of the 2015 harvest and export grade apple volumes were around 13 percent ahead of prospectus forecasts.

Williamson said Scales’ share price had risen on the news and with the impact of the lower NZ dollar on export receipts.

“It’s going to be interesting as the market heads into reporting season to see the outcome for a lot of exporting companies, and those with offshore operations, of a lower NZ dollar,” he said.

MightyRiverPower led the market up, rising 3 percent to $2.75 and Spark rose 2.5 cents to $2.96. Williamson said that reflected investors buying in on the basis of dividend yield in the low interest rate environment.

“A lot of money is coming out of banks and investors are looking for conservative, high-yielding stocks and the utility sector is where a lot of these can be found,” he said.

Sky City has also had a good week, finishing trading up 9 percent to $4.42, after earlier in the week announcing a lower-than-expected gaming tax will be required by the Northern Territory state government for its Darwin casino. The company had expected the annual tax would be up to $6 million but it now estimates operating costs will rise around $1 million.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Rocket Lab: Launch Expected

Rocket Lab has delayed the roll out of the launch vehicle called Electron by one day, due to weather conditions. The planned launch attempt will now take place on Tuesday, May 23, 2017. More>>


Budget: Irrigate (Good Times, Come On!)

Additional grant funding of $26.7 million over the next three years plus a capital boost of $63 million towards irrigation investments in Budget 2017 will deliver economic and environmental benefits through better use of water... More>>


Silver Fern Farms: Proposal To Close Fairton Sheepmeat Plant

Silver Fern Farms has advised its people of the proposal to permanently close the site, and has discussed potential transfer options to its other sites in the region as part of the consultation process...


MPI: Myrtle Rust Appears In Taranaki

The nursery in Waitara (just north of New Plymouth) reported suspected myrtle rust symptoms on young plants to the Ministry’s 0800 number yesterday (Tuesday). More>>