MARKET CLOSE: NZ shares up 2% as energy stocks rally on expert report; A2, Fisher & Paykel Health gain
By Sophie Boot
Sept. 11 (BusinessDesk) - New Zealand shares rose strongly in busy trading, led by A2 Milk Co and Contact Energy. Energy stocks gained on the release of a sector report which allayed fears of tighter regulation.
The S&P/NZX50 Index gained 176.94 points, or 2 percent, to 9,225.57. Within the index, 38 stocks rose, 10 were unchanged and two fell. Turnover was $203.2 million.
Mark Lister, head of private wealth research at Craigs Investment Partners, said the index's gains were being pushed by large stocks. The best performer today was A2 Milk Co, up 4.9 percent to $12.10. Lister said an investor presentation by the firm in Hong Kong "seems to have been well received".
"Last week was the worst week the New Zealand market had had in several months, so we were due for a bit of a bounce and that seems to have come today," Lister said. "We had positive leads from offshore, the US market had a positive line of trading and so did Europe so it's more of a reaction to that."
New Zealand outperformed mixed Asian markets this afternoon. At 5:15pm New Zealand time, the S&P/ASX 200 was up 0.6 percent, Japan's Nikkei 400 had risen 0.6 percent, while Hong Kong's Hang Seng was down 0.1 percent.
Adding to local tailwinds was the release of an expert advisory panel's report into the electricity sector, which saw energy stocks surge today.
Contact Energy rose 3.6 percent to $5.74, Meridian Energy gained 2.7 percent to $3.245, Genesis Energy advanced 2.7 percent to $2.505. Infratil gained 2.2 percent to $3.485.
"Nothing too draconian has come out of that report," Lister said. "It's a bit of a relief reaction in the sense that there's nothing in that report that's going to be a major issue for any of those companies."
Fisher & Paykel Healthcare gained 2.4 percent to $15.15. It has filed a complaint against its rival ResMed, alleging some of ResMed's masks used to treat obstructive sleep apnea infringe its patents. The rival companies have been locked in litigation since 2016 spanning the US, UK, Europe, New Zealand and Australia.
The worst performer was Fonterra Shareholders' Fund, which dipped 0.2 percent to $5.02. Fonterra Cooperative Group is set to release its annual earnings on Thursday morning.
Outside the benchmark index, Tilt Renewables was unchanged at $2.31. It has signed a 15-year supply deal with Victoria's state government for about 37 percent of the output from the company's proposed Dundonnell wind farm. Major Tilt shareholders Infratil and Mercury NZ are still seeking to take over Tilt, pooling their stakes into a new entity and offering $208.5 million, or $2.30 a share, to minority shareholders.