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MARKET CLOSE: NZX 50 rises to new record, Meridian, MRP gain

MARKET CLOSE: NZX 50 rises to new record, Meridian, MRP extend gains

Suze Metherell
Wed, 29 Oct 2014

New Zealand shares rose to a record for a fifth day, paced by Meridian Energy and MightyRiverPower as investors hunted for yield and repositioned portfolios ahead of an international index change. Guinness Peat Group recovered from yesterday's sell-off on news protracted UK pension scheme problems.

The NZX 50 Index rose 17.544 points, or 0.3 percent, to 5355.875. Within the index, 24 stocks rose, 14 fell and 12,were unchanged. Turnover was $125 million.

Meridian advanced 2.5 percent to $1.67. The partially privatised power generator and retailer flagged a possible capital return to investors at its annual meeting in Wellington today. The stock debuted on the NZX a year ago today at $1 with the final instalment of 50 cents from investors due next May. Fellow government controlled energy company, MRP climbed 1.1 percent to a record close of $2.87.

"Yet again, Meridian and MightyRiverPower continuing on their merry way, driven by a quest for dividend yield," Matthew Goodson, managing director at Salt Funds Management said. "Another reason is some speculation about future MSCI Index changes, which will be announced next week, which is seeing considerable pre-positioning by traders." Investors who follow the international index have to hold the stocks that join the index.

Xero, the cloud-based accounting software firm whose shares have tumbled 49 percent over the past six months, was unchanged at $16.15, and is expected to exit the MSCI index, Goodson said.

GPG advanced 4 percent to 52 cents after being sold off yesterday after its Coats unit reported flat sales in the third quarter, affirming expectations annual profit will meet market forecasts. GPG is in the process of rebranding as Coats after liquidating its broader portfolio, though that's been delayed by protracted negotiations to settle its group pension liability with the UK Pensions Regulator.

"It's been sold off very sharply," Goodson said. "They are still having continued issues with the UK Pensions Regulator which appears some way from being resolved."

Chorus, the regulated telecommunications network operator, rose 1.5 percent to $2.10. Today shareholders voted on whether to approve a lift in the pool for directors' fee to $1.1 million from $980,000, which was set in 2012 when Chorus was carved out of the then-dominant telecommunications company, Telecom Corp, which has since rebranded as Spark New Zealand. Chorus wants to add another independent director to its board to enhance its capability in what's become a vastly different landscape in just three years.

Spark fell 0.6 percent to $3.115. Genesis Energy fell 0.8 percent to $1.985. Contact Energy slipped 0.2 percent to $6.22.

NZX, the New Zealand stock exchange operator, rose 1.7 percent to $1.19. The Wellington-based company said revenue rose 6.7 percent to $16.5 million in the three months ended Sept. 30, lagging the year earlier's 12 percent pace as activity slowed ahead of September's general election and the number of new listings declined.

Heartland New Zealand fell 1 percent to 99 cents. Its Heartland Bank had its credit rating lifted a notch by Fitch Ratings, raising the Christchurch-based lender's long-term issuer default rating to BBB from BBB-minus, its short-term rating to F2 from F3 and its viability rating to bbb from bbb-minus.

Vital Healthcare Property Trust, the country's biggest listed medical and healthcare property investor, gained 0.3 percent to $1.495. It has signalled development plans totalling A$15.5 million in Australia, and has sold a New Zealand property as it looks to exit low-growth assets.

Fletcher Building, New Zealand's largest listed company, gained 1 percent to $8.45.

Skellerup Holdings fell 0.7 percent to $1.45 after the industrial rubber goods maker told shareholders it anticipates annual earnings of between $21 million and $24.5 million in the year ending June 30, 2015, up from adjusted earnings of $20.7 million a year earlier. 

Outside the benchmark index, Pumpkin Patch dropped 2.6 percent to 38 cents. Its 2014 annual report out today showed its accounts were tagged by auditor PwC over the unprofitable childrenswear retailer's reliance on bank funding to continue trading as a going concern.

Dorchester Pacific was unchanged at 26 cents and has gained some 18 percent this year, while Turners Group was unchanged at $3.05 and has gained 30 percent since the beginning of the year. The Auckland-based finance company, has reached the 90 percent threshold in its takeover of Turners, allowing it to mop up remaining shares in the car auction firm.


Suze Metherell
Wed, 29 Oct 2014
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MARKET CLOSE: NZX 50 rises to new record, Meridian, MRP gain