MARKET CLOSE: NZ shares rise on election speculation   23 Apr 2014

MARKET CLOSE: NZ shares rally on election speculation, MRP, Contact, Vector rise; Xero leads gainers

By Suze Metherell

April 23 (BusinessDesk) – New Zealand stocks rose as a front bench Labour Party MP quit, stoking speculation the incumbent National-led government will return for a third term. Contact Energy, Vector and MightyRiverPower gained. Xero led the advance.

The NZX 50 Index rose 37.983 points, or 0.7 percent, to 5142.922. Within the index, 30 stocks rose, 11 fell and nine were unchanged. Turnover was $104 million.

Labour MP Shane Jones, who ran for the party’s leadership last year, has quit politics to take up a Pacific economic ambassador post created for him by the National-led government, a move that may weaken Labour’s prospects in this year’s election. The opposition parties want to further regulate New Zealand’s energy market, which has spooked investors from the sector.

Contact climbed 2 percent to $5.69. Government-controlled MightyRiverPower, rose 0.9 percent to $2.26, while Auckland lines company Vector advanced 0.8 percent to $2.49. TrustPower lifted 1.5 percent to $6.65. Meridian Energy fell 0.4 percent to $1.185.

Outside the benchmark index, Genesis Energy, the last asset in the government’s partial-privatisation scheme to be publically listed, fell 1.1 percent to $1.81 on its third day of trading, after climbing 18 percent in its first two days of trading.

“Shane Jones’s resignation overnight may help the sector give it more flavour to a National-led government after the election,” said Craig Stent, an analyst with Harbour Asset Management “These stocks have been impacted over the last 12 months with the Labour-Greens proposal, so you might see a little bit of a re-rate in terms of these stocks, and obviously Genesis has gone well since its IPO.”

Xero climbed 3.2 percent to $32.30. The cloud-based accounting software maker’s stock has fallen 28 percent over the past month as investors across the world sold high growth and tech stocks amid fears the companies wouldn’t deliver on their high valuations.

“Xero is fairly volatile in terms of its trading range,” Stent said. “If you look at where it is trading at the moment, it is probably still one of the most expensive software-as-a-service models in the world.”

Pacific Edge, the Dunedin-based biotech company, slipped 0.9 percent to $1.12. Diligent Board Members Service, which makes a governance app, was unchanged at $4.60

Fletcher Building, New Zealand’s largest listed company, rose 1.5 percent to $9.74. Telecom advanced 0.4 percent to $2.635. Auckland International Airport climbed 1.5 percent to $4.03 while casino operator SkyCity Entertainment Group was up 1 percent to $4.03.

Harbour Asset’s Stent said recent “wobbles” in global growth had spurred some investors to more defensive stocks, such as listed property entities, on the prospect interest rates may stay lower for longer.

“Growth is still chugging along ok but it has been a bit patchy in parts, so you’re seeing investors searching out for companies that can deliver on earnings and dividends,” Stent said.

Property For Industry climbed 0.8 percent to $1.29. Argosy Property rose 0.6 percent to 91.5 cents. Kiwi Income Property Trust increased 0.4 percent to $1.14 while Goodman Property Trust was unchanged at 98.5 cents.

Warehouse, New Zealand’s largest listed retailer, rose 2.7 percent to $3.40. Brisbane-based jeweller Michael Hill International advanced 0.8 percent to $1.32, while online auction site Trade Me Group slipped 0.5 percent to $3.89. Kathmandu Holdings, the outdoor goods retailer, fell 0.3 percent to $3.69.

Outside the NZX 50 Hallenstein Glasson, the clothing chain, jumped 6.3 percent to $3.40, a three-month high.

(BusinessDesk)

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