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MARKET CLOSE: Shares rise as investors hunt yield; Tower, Meridian gain

New Zealand shares rose, paced by Meridian Energy and Tower, as investors sought out higher yields amid rising political uncertainty ahead of this month's general election.

The NZX 50 Index rose 2.623 points, or 0.05 percent, to 5224.396. Within the index, 21 stocks rose, 16 fell and 13 were unchanged. Turnover was $161.5 million.

The market was lifted by demand for high-dividend yielding stocks amid heightened uncertainty over the outcome of the Sept. 20 general election after a Roy Morgan opinion poll showed voter support slipping for the incumbent National-led government to 45 percent and gaining for the opposition Labour and Green parties to 42 percent.

Energy stocks have typically suffered in the face of electoral uncertainty with the opposition parties pledging to introduce a state-owned single electricity buyer in a bid to push down retail prices. Still, utility stocks offer a high, steady yield, making them attractive in an investment environment where interest rates remain at historic lows.

"The election is a question mark for some investors," said Shane Solly, director at Harbour Asset Management. "The energy companies are exposed to a change in government should that occur. They have held up well on that basis. The interesting thing is people are still hunting for high-income dividend yield and certainly the New Zealand utilities hold up reasonably well on that basis."

​Meridian Energy, which offers an 8.9 percent dividend yield, climbed 1.2 percent to $1.255. Contact Energy, which offers a 6.1 percent dividend yield, rose 0.4 percent to $5.45. Genesis Energy, which signalled a dividend of up to 16.5 percent in 2015 in its prospectus, was unchanged at $1.79. MightyRiverPower, which offers a 6.3 percent dividend yield, slipped 0.4 percent to $2.31. ANZ Bank New Zealand offers 4.75 percent on an 18-month $10,000 term deposit.

Tower, which has a dividend yield of 7.3 percent, advanced 1.5 percent to $2.01. The Reserve Bank has lowered the minimum amount the general insurer must have on hand by $30 million, which it has flagged returning to shareholders once it completes its Canterbury earthquake claims next year.

NZX was unchanged at $1.24. The stock market operator's monthly metrics showed the number of trades on the NZX rose 8.8 percent to 107,104 in August from the year earlier month, as equity transactions increased 9.1 percent to 104,400 while debt trading declined 2.7 percent to 2,704.

Pacific Edge led the benchmark index higher up 3.8 percent to 82 cents. The Dunedin-based biotech firm is extending gains after announcing further contracts with US healthcare providers for its non-invasive bladder cancer test, Cxbladder, Solly said.

Auckland International Airport rose 0.4 percent to $3.72, with more than $45 million of shares changing hands. Fletcher Building, New Zealand's largest listed company, rose 0.9 percent to $9.26. Spark New Zealand, formerly Telecom Corp, slipped 1 percent to $2.99.

Xero was the worst performer on the day down 2.5 percent to $24.

Outside the benchmark index, Kirkcaldie & Stains rose 2.4 percent to $2.10. The upmarket Wellington department store says it made a narrower pre-tax loss in the latest financial year of $1.1 million, and its board may have to write down the value of assets.

IkeGPS rose 8.8 percent to 99 cents after a favourable analyst report. The stock was sold in an initial public offer at $1.10, on July 23.

Acurity Health Group rose 0.6 percent to $6.97. The hospital operator is under a takeover offer by Connor Healthcare, which is hoping to buy the 29 percent of the company it doesn't own at $7.25 a share. To date it has received acceptances totalling 1.69 percent, taking Connor's holding up to 72 percent.

Seeka Kiwifruit Industries was unchanged near a five-year high at $3.29 and has gained some 57 percent this year. The fruit grower and coolstore and packhouse operator is looking to secure kiwifruit supply over the next three years by offering growers shares in return for exclusive supply from their orchards.

(BusinessDesk)

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