MARKET CLOSE: NZX 50 Index rises to record, Meridian, MRP at new highs; Pacific Edge climbs

New Zealand's NZX 50 Index rose to a record, as Meridian Energy and MightyRiverPower extended gains following the convincing win by the incumbent National-led government. A falling New Zealand dollar boosted currency exposed stocks, such as Fisher & Paykel Healthcare.

The benchmark index rose 19.689 points, or 0.4 percent, to 5277.861. Within the index, 26 stocks rose, 16 fell and seven were unchanged. Turnover was $124.7 million.

Saturday's general election delivered Prime Minister John Key and his government a third term, and the potential to govern alone, which is unusual under New Zealand's mixed member proportional electoral system. The power electricity generator-retailers extended yesterday's gains, as the election win shut down the threat of regulation, which had been a cornerstone policy for opposition parties in trying to drag down power prices for consumers.

Meridian rose for its sixth consecutive day, up 0.3 to a record $1.55. MRP climbed 1.2 percent to $2.59, the highest since shortly after it floated in May 2013. Infratil, which has a majority stake in TrustPower, rose 1.1 percent to a six-year high of $2.83. Contact Energy slipped 0.2 percent to $5.91.

"Our market continues to go pretty well with the electricity sector still chugging along nicely," said Mark Lister, head of private wealth research at Craigs Investment Partners. "Investors still getting more and more comfortable with those stocks after the election."

The New Zealand dollar tumbled more than half a US cent and recently traded at 79.90 US cents, the first time it has been below 80 cents since this time last year, after Reserve Bank governor Graeme Wheeler invoked two of the conditions for the bank to intervene in currency markets, saying its strength was "unjustified and unsustainable" given the decline in commodity prices. A weaker currency is good news for exporters, as it makes their goods more competitively priced overseas and boosts earnings when they're translated back into the kiwi dollar.

F&P Healthcare, which exports more than 90 percent of its breathing apparatus, climbed 1.6 percent to $5.14.

"The weakening currency is good for the export sector," Lister said. "There is also a general economic boost that people assume that the country will get if we see sustained currency weakness."

Pacific Edge climbed 2.3 percent to 91 cents. The medical biotech company has been awarded a Japanese patent for its colorectal cancer screening technology, as the company looks to expand its range of diagnostic tests internationally.

"When you get news flow, particularly when you're in that biotech space, you've had something that adds to your credibility from offshore markets, its going to see the share price react," Lister said.

Hallenstein Glasson jumped 9.1 percent to $3.10. The clothing chain posted a 24 percent drop in annual profit to $14.3 million but said all chains in the group are trading ahead of year earlier levels in the first seven weeks of the new financial year, with a "solid improvement" in its gross profit margin. The stock dropped out of the benchmark index earlier this year.

"That result was in line with what people were expecting anyway and they had some quite upbeat comments on how the first several weeks have gone, so that's positive," Lister said.

Fellow retailers gained on news of the positive start for Hallenstein's year. Kathmandu Holdings, the outdoor goods retailer, advanced 2.2 percent to $3.27. Warehouse Group, New Zealand's largest listed retailer, rose 0.3 percent to $3.10.

Shares of Vector rose 0.8 percent to $2.64 after it said the Inland Revenue Department would appeal a High Court ruling in favour of the Auckland-based lines company over a $53 million payment.

New Zealand Refining was unchanged at $1.61 after oil companies said they were going ahead with a contingency plan to import fuels to offset the impact of a potential 11-day shutdown of the Marsden Point refinery due to pending industrial action. The two-day strike would have the biggest disruption to jet fuel supplies. Air New Zealand fell 0.3 percent to $1.965, while Auckland International Airport was unchanged at $3.75.

NZAX-listed Chatham Rock Phosphate climbed 15 percent to 11.5 cents after hearings began on its application to mine the Chatham Rise seabed for phosphate. The would-be undersea miner told the Environmental Protection Agency committee the phosphate is a "strategic resource of national significance" and that its project would have a limited impact on the area.

Shares of Fletcher Building rose 0.1 percent to $8.79, a day after the country's biggest listed company said it was shutting down its Australian copper tube manufacturing business.

Spark New Zealand, formerly Telecom Corp, gained 0.7 percent to $2.99.

Nuplex Industries paired some of yesterday's gain, falling 5 percent, or 16 cents, to $3.06, after shedding rights to its 11 cents per share dividend. The specialty chemicals maker yesterday said it was in talks to sell two of its trans-Tasman businesses

Units in the Fonterra Shareholders' Fund, which gives investors exposure to Fonterra Cooperative Group's dividend stream, gained 0.2 percent to $6.30, a day after the dairy exporter beefed up its forecast dividend, while at the same time cutting its expected payout to famers. Synlait Milk, a rival milk processor, fell 1.2 percent to $3.32.

Pumpkin Patch climbed 7.5 percent to 43 cents after the clothing retailer continued to freshen up its board, signaling the exit of director and former chief executive Maurice Prendergast, who will be replaced by Bruce Cotterill from next month.

(BusinessDesk)