MARKET CLOSE: NZX 50 Index rises to record; MRP, Meridian gain on Tiwai, Trilogy soars
By Jonathan Underhill
Aug. 3 (BusinessDesk) - New Zealand shares rose, pushing the S&P/NZX 50 Index to a record, as MightyRiverPower and Meridian Energy gained on the decision to keep the Tiwai Point aluminium smelter open until at least 2017. Trilogy International soared after forecasting a jump in first-half sales and profit.
The S&P/NZX 50 index advanced 36.89 points, or 0.6 percent, to 5,957.85. Within the index, 27 stocks rose, 18 fell and five were unchanged. Turnover was $72 million.
Meridian climbed 3.1 percent to $2.32 after Rio Tinto-owned New Zealand Aluminium Smelter said it would keep open a smelter that consumes one-seventh of New Zealand's electricity and will pay closer to market rates. MightyRiverPower gained 4.4 percent to $2.88. Among other power companies, Contact Energy gained 1.4 percent to $5.02, Genesis Energy rose 3.5 percent to $1.77 and Infratil-controlled TrustPower advanced 0.9 percent to $7.90.
"There's definitely been a relief rally as some of what would have been a negative has dropped away," said Shane Solly, portfolio manager at Harbour Asset Management. "The announcement today is good for New Zealand Inc and the gen-tailers."
Fonterra Shareholders' Fund, whose units are entitled to the dividends from the dairy company's shares, rose 2.6 percent to $4.80 ahead of the GlobalDairyTrade auction this week and the outcome of Fonterra's board meeting on Friday, which may include a fresh forecast for milk payments and the outlook for dairy prices, which have slumped from last year's highs.
"That's been very weak for some time and there's people trying to pick a turning point there," Solly said. "The macro environment remains pretty tough for the dairy sector."
Fletcher Building rose 0.6 percent to $7.97 after the construction and building products group said it would merge its distribution units in Australia and New Zealand, and was farewelling its chief information officer. Chief executive Mark Adamson is trying to revive the performance of the business in Australia, where a drop off in resources sector investment needs to be made up for by more spending on infrastructure, commercial and residential building.
Network operator Chorus rose 0.4 percent to $2.88 and Spark New Zealand gained 1.2 percent to $2.995.
Pacific Edge, which makes a test for bladder cancer, rose 5 percent to 63 cents, leading the index higher. Air New Zealand rose 1.9 percent to $2.69 and Auckland International Airport climbed 1.6 percent to $5.495.
Argosy Property led gains among some property investors, rising 1.8 percent to $1.135. Property for Industry rose 0.7 percent to $1.56 and Kiwi Property Group gained 0.4 percent to $1.385.
Retirement village operator Summerset Group Holdings rose 1.4 percent to $4.24 and rival Ryman Healthcare gained 0.5 percent to $8.44.
Trilogy jumped 24 percent to $1.18 after the skincare products and scented candle maker said first-half revenue is likely to exceed $23 million, a year-on-year increase of more than 50 percent, following strong growth across all three of its brands. Profit would rise to $3.5 million in the six months ending Sept. 30, from $1.1 million a year earlier.
Cavalier Corp climbed 13 percent to 52 cents after the carpet maker announced plans to sell assets, outsource operations, cut staff and pay down debt in a bid to return to profitability.
Blis Technologies, which makes oral health remedies, dropped 8 percent to 2.3 cents after chief executive Barry Richardson said he will leave the probiotic manufacturer at the end of the current financial year after nine years in charge of the company.