S&P/NZX 50 Index rises to record

  • 03/08/2015
S&P/NZX 50 Index rises to record

New Zealand shares rose, pushing the S&P/NZX 50 Index to a record, as Mighty River Power and Meridian Energy gained on the decision to keep the Tiwai Point aluminium smelter open until at least 2017.

The S&P/NZX 50 Index advanced 36.89 points, or 0.6 percent, to 5,957.85 today.

Within the index, 27 stocks rose, 18 fell and five were unchanged. Turnover was $72 million.

Meridian climbed 3.1 percent to $2.32 after Rio Tinto-owned New Zealand Aluminium Smelters said it would keep open a smelter that consumes one-seventh of New Zealand's electricity and will pay closer to market rates.

MRP gained 4.4 percent to $2.88. Among other power companies, Contact Energy gained 1.4 percent to $5.02, Genesis Energy rose 3.5 percent to $1.77 and Infratil-controlled TrustPower advanced 0.9 percent to $7.90.

"There's definitely been a relief rally as some of what would have been a negative has dropped away," said Shane Solly, portfolio manager at Harbour Asset Management.

"The announcement today is good for New Zealand Inc and the gen-tailers."

Fonterra Shareholders' Fund, whose units are entitled to the dividends from the dairy company's shares, rose 2.6 percent to $4.80 ahead of the GlobalDairyTrade auction this week and the outcome of Fonterra's board meeting on Friday, which may include a fresh forecast for milk payments and the outlook for dairy prices, which have slumped from last year's highs.

"That's been very weak for some time and there's people trying to pick a turning point there," Mr Solly said.

Fletcher Building rose 0.6 percent to $7.97 after the construction and building products group said it would merge its distribution units in Australia and New Zealand.

Pacific Edge, which makes a test for bladder cancer, rose five percent to 63 cents, leading the index higher.