close
MENU
2 mins to read

MARKET CLOSE: Shares rise; Meridian, Spark, Air NZ gain

S&P/NZX 50 advanced 55.08 points, or 1%, to 5805.96.

Suze Metherell
Wed, 15 Jul 2015

New Zealand shares rose as investors bought yield stocks such as Meridian Energy and Spark New Zealand, in anticipation of interest rates falling and as global sentiment became more upbeat. Air New Zealand led the index higher.

The S&P/NZX 50 advanced 55.08 points, or 1%, to 5805.96. Within the index 32 stocks rose, 11 fell and seven were unchanged. Turnover was $126 million.

Investors bought income-paying equities, like utility companies, on the anticipation the Reserve Bank will move to cut the official cash rate a further 25 basis points to 3% next week, with traders pricing in a 92% chance of a cut.

Meridian climbed 4.8% to $2.18. Genesis Energy gained 0.6% to $1.72. Spark NZ, formerly Telecom Corp, rose 0.9% to $2.865. Kiwi Property Group, the listed property investor, advanced 1.5% to $1.35.

"You've got 16 economists out of 16 saying a rate cut next week, obviously [between] interest rates and share markets there is a very strong negative correlation," said James Smalley, director at Hamilton Hindin Greene. "A rate cut makes yield plays look quite attractive. People are focusing more on the micro than the macro, which has been dominating headlines for the past few weeks."

Further boosting sentiment was more certainty around the outlook for Greece and its deal with creditors, while Chinese economic data met expectations, cooling market fears of weakness in the world's second largest economy. Fears of a Greek exit from the eurozone and the sharp correction in China's stock markets had seen selling in global equities.

China "doesn't look as it's going to fall off a cliff anytime soon and in the absence of that negative news people are feeling a bit more comfortable with getting back into the market," Mr Smalley said.

Air New Zealand, the national carrier, led the benchmark higher, jumping 6.3% to $2.69. A2 Milk Co. gained 4.1% to 77c. Trade Me Group, the online auction site, advanced 2.2% to $3.32. Casino operator SkyCity Entertainment Group rose 2% to $4.19.

Pacific Edge, the Dunedin-based biotech firm, was the worst performer on the day, down 1.5% percent to 65c.

Orion Health Group advanced 2.3% to $3.98 after the healthcare software company said it is performing in line with management's expectations. The Auckland-based company held cash and short-term deposits of $96 million as at June 30, having generating $200,000 of operating cashflow in the three-month period.

Goodman Property Trust was unchanged at $1.23. The country's second-biggest listed property investor will build a new $26.8 million coolstore at its Highbrook Business Park site in Auckland.

Outside the benchmark index, PGG Wrightson was unchanged at 47c. The rural services firm controlled by China's Agria Corp will take a 50% stake in Agrocentro Uruguay for an undisclosed amount, made up of an upfront payment and capped earn-outs over the next three years.

(BusinessDesk)

Suze Metherell
Wed, 15 Jul 2015
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
MARKET CLOSE: Shares rise; Meridian, Spark, Air NZ gain
49577
false