MARKET CLOSE: Shares rise as power co.s reach records, Diligent gains

New Zealand shares rose as MightyRiverPower, Genesis Energy and Meridian Energy reached records on their inclusion in international stock indices. Diligent Board Member Services gained after its third quarter sales beat expectations and it lifted full year guidance.

The NZX 50 Index rose 15.38 points, or 0.3 percent, to a record close of 5418.99. Within the index, 22 stocks rose, 15 fell and 13 were unchanged. Turnover was a bigger than normal $178 million.

The semi-annual review of the MSCI Equity Indexes saw the three government-controlled energy generators and retailers climb to records after MRP and Meridian were included in the MSCI Global Standard Index, exiting the MSCI Global Small Cap Index, which Genesis was added to.

MRP advanced 3 percent to $2.96. Genesis gained 3.8 percent to $2.21 and Meridian climbed 3.3 percent to $1.72.

"The electricity stocks are all flying and performing exceptionally well," said Mark Lister, head of private wealth research at Craigs Investment Partners. "We've seen Meridian and MightyRiverPower getting added the MSCI main index. The stocks that are going in or out of those indices are seeing more activity."

Investors who follow the indices are required to hold a certain amount of the stock, with changes causing selling and buying in new or departing stocks.

Xero exits standard MSCI index
Meanwhile, Xero advanced 3.5 percent to $17.52 as the cloud-based accounting software firm departed the standard MSCI index, to join the small cap.

"Xero is having a bit of a rally as people have been anticipating this," said Shane Solly, director at Harbour Asset Management. "While it is leaving the main index, it is going into a smaller index. There's been a number of hedge funds short-selling Xero, in anticipation of this, so some of them could be closing out or reducing there, which may explain the recovery in the stock price today."

Diligent advanced 3.3 percent to $4.99. The governance app developer boosted earnings 8 percent to US$2.7 million in the September quarter, beating guidance, and lifted its full-year revenue forecast to between US$82.5 million and US$83 million, up from an earlier sales range of between US$81.5 million and US$82.5 million.

"They've upgraded their revenue expectation and it looks like margins were a little better," said Craigs' Lister.

Warehouse Group slipped 0.9 percent to $3.17 after the country's biggest listed retailer said it had lifted first-quarter sales 3.5 percent to $569.8 million, opening more Noel Leeming and stationery stores, and widened margins at its dominant 'Red Shed' unit.

"There is still the feeling in the market it's having a tough time," said Lister. "It's still a stock that's out of favour."

NZX, the stock market operator, gained 0.9 percent to $1.19 after the bookbuild for Orion Health Group, which develops software systems for patient health management,  saw its shares priced at $5.70 a piece, the top of the range, as it looks to raise a $125 million in an initial public offer. Lister, whose firm, Craigs, were joint manager in the float, said the offer was very popular.

Pacific Edge, the Dunedin-based biotech firm, was the day's worst performer on the benchmark index, falling 3.5 percent to 82 cents.

Spark New Zealand rose 0.5 percent to $3.055. The rebranded Telecom Corp said it was nearing the end of the first phase of its transformation from a traditional telecommunications company to a digital services business.

Fletcher Building, New Zealand's largest listed company, slipped 1.7 percent to $8.36.

OceanaGold Corp led the benchmark higher advancing 5.4 percent to $2.16.

Outside the benchmark index, Veritas Investments was unchanged at $1.20, paring an intraday gain to $1.32, after the food and beverage investor, which owns Nosh Food Market, Kiwi Pacific Foods and the Mad Butcher franchise, agreed to buy The Better Bar Group of companies for $31.2 million in cash and shares, its fourth acquisition in 18 months.

Augusta Capital slipped 1 percent to 95 cents after the property investor and fund manager lifted first-half earnings 11 percent to $3.61 million as its Victoria Dock syndication helped drive revenue in its funds management unit, and as it bedded in an expanded property portfolio.

(BusinessDesk)