MARKET CLOSE: NZ shares rise as power companies extend gains   23 Sep 2014

Article - BusinessDesk

MARKET CLOSE: NZ shares rise as Genesis, Meridian extend gains after election

By Suze Metherell

Sept. 23 (BusinessDesk) - New Zealand shares rose as energy companies extended yesterday's gains after the incumbent National-led government's convincing general election win on Saturday, lifting the threat of further regulation for the power sector. Kathmandu Holdings fell after reporting a decline in annual earnings.

The NZX 50 Index rose 5.151 points, or 0.1 percent, to 5241.443. Within the index, 23 stocks rose, 16 fell and 11 were unchanged. Turnover was $97.1 million.

The general election delivered Prime Minister John Key and his government a third term, and the potential to govern alone, which is unusual under New Zealand's mixed member proportional electoral system. The power electricity generator-retailers extended yesterday's gains, as the election win shut down the threat of regulation, which had been a cornerstone policy for opposition parties in trying to drag down power prices for consumers.

State-controlled Genesis Energy advanced 2.1 percent to a record close $1.99. Fellow partially-privatised gentailer Meridian Energy increased 1.3 percent to $1.54. Contact Energy gained 1 percent to $5.91. TrustPower rose 0.7 percent to $7.45. Infratil, the infrastructure investor, lifted 0.5 percent to $2.79. MightyRiverPower slipped from a 16-month high, down 0.6 percent to $2.575.

The regulatory threat "had been holding the stocks back for quite some time - even though the stocks had rallied quite strongly pre-election there was some still good buying yesterday and there is still good buying today," Grant Williamson, director at Hamilton Hindin Greene said. "Investors now have the confidence to buy those stocks for their dividend yields, which are still attractive even at these higher levels."

Air New Zealand, the national carrier sold down by the government in its asset sale programme, was unchanged at $1.945.

Other companies facing regulatory threat paced gains, with telecommunications network operator Chorus up 0.9 percent to $1.785, as it faces a protracted dispute with the Commerce Commission over the pricing of its regulated copper lines network, while casino operator SkyCity Entertainment Group, the beneficiary of a deal with the National-led government to build a convention centre in Auckland, rose 0.5 percent to $3.72.

Vector, the Auckland lines company, was the worst performer on the day, declining 1.9 percent to $2.62.

Fletcher Building, New Zealand's largest listed company, fell 1.6 percent to $8.91 as $15.5 million worth of its shares changed hands.

"Fletcher had a good day yesterday, but the profit takers have come back into the stock today," Williamson said.

Kathmandu dropped 1.6 percent to $3.10. The outdoor goods retailer reported a 5.4 percent decline in annual profit to $42.2 million, in line with guidance given, as a slow start to winter crimped sales. The Christchurch-based company plans to invest $5 million to expand its business in the UK and Europe this financial year, in the first phase of a three-year strategy to build its global brand, which may dent earnings growth.

"The concern going forward is their expansion and the cost of the expansion into the UK and Europe," Williamson said. "That is starting to weigh on the share price a little bit."

OceanaGold Corp led the benchmark index higher, up 5.9 percent to $2.68.

Spark New Zealand, formerly Telecom Corp, rose 0.5 percent to $3.03.

Outside the benchmark index, SLI Systems fell 8.3 percent to a record low of $1.21. The search engine developer announced initial shareholders sold 6.8 percent of the company at the end of a 16-month lock-up period at 23 percent below last year's $1.50 offer price. Among those who sold were non-executive director and co-founder Steve Marder and vice president of business intelligence and co-founder Geoff Brash, with institutional investors the buyers.

Williamson said the release of the escrowed shares may be creating an overhang in the market, where sellers are trying to get rid of more than the market wants to buy.

On the NZ Alternative Index, GeoOp was unchanged at 62 cents, paring an 11 percent intraday drop to a record low of 56 cents, after its chief executive Leanne Graham has resigned 11 months after the small business app developer will take a new role with the company leading its push into the US.

(BusinessDesk)

Add a comment

News

Hilary Timmins' Award-Winning UK Documentary Series To Inspire NZ Students

29 Jun 2020 Education
Dream Catchers, produced and directed by Hilary Timmins, celebrates the success stories of more than thirty inspirational New... more

New Zealand reaffirms support for Flight MH17 judicial process

7 Mar 2020 News By Rt HON WINSTON PETERS
Ahead of the start of the criminal trial in the Netherlands on 9 March, Foreign Minister Winston Peters has reaffirmed the need to... more

Business

NZ Government's Economic package to fight COVID-19

17 Mar 2020 Business News By RT HON JACINDA ARDERN
The Coalition Government has launched the most significant peace-time economic plan in modern New Zealand history to cushion the... more

NZ Government announces aviation relief package

19 Mar 2020 Business News By Hon Phil Twyford
Transport Minister Phil Twyford today outlined the first tranche of the $600 million aviation sector relief package announced earlier... more

Living

Diversity was Key at New Zealand Trade Tasting in London

6 Jun 2022 Food & Wine
New Zealand Winegrowers Annual Trade Tasting was recently held in London, on Wednesday 4 May, in Lindley Hall. It was the first... more

Kiwi author stuns Behind the Butterfly Gate

12 Jan 2022 Arts By Charlotte Everett
Hidden behind the Butterfly Gate is where the secret has been kept for 76 years...  New Zealand writer Merryn Corcoran’s... more

Property

Fairer rules for tenants and landlords

17 Nov 2019 Property By Minister Kris Faafoi
17 NOVEMBER 2019 The Government has delivered on its promise to the over one million New Zealanders who now rent to make it fairer... more

New Zealand Government will not implement a Capital Gains Tax

17 Apr 2019 Property By RT HON JACINDA ARDERN
The Coalition Government will not proceed with the Tax Working Group’s recommendation for a capital gains tax, Jacinda Ardern... more

Migration

Boosting border security with electronic travel authority – now over 500,000 issued

19 Nov 2019 Migration By Hon Iain Lees-Galloway
19 NOVEMBER 2019 We’ve improved border security with the NZeTA, New Zealand Electronic Travel Authority, which helps us to... more

Christchurch reinstated as refugee settlement location

18 Aug 2018 Migration
18 AUGUST 2018 HON IAIN LEES-GALLOWAY The announcement that Christchurch can once again be a settlement location for refugees... more

Travel

Gallipoli Anzac Day services cancelled

19 Mar 2020 Travel & Tourism By RT HON JACINDA ARDERN
The New Zealand and Australian Governments have announced this year’s joint Anzac Day services at Gallipoli will be cancelled... more

New Zealanders advised not to travel overseas

19 Mar 2020 Travel & Tourism
New Zealanders advised not to travel overseas more

Sport

The Skipper's Diary: Sir Richard Hadlee honouring his father and NZ's Forty-Niners

27 Oct 2019 Cricket By Charlotte Everett
NZNewsUK London Editor Charlotte Everett spoke to Sir Richard Hadlee about why he’s chosen to publish his father’s... more

PREVIEW: All Blacks v England semi-final

26 Oct 2019 Rugby
The two most convincing quarterfinals winners are set to square off in a semifinal showdown for the ages when the All Blacks meet old... more

Columns

Gordon Campbell on the Gareth Morgan crusade

11 Nov 2016 Opinion
Gordon Campbell on the Gareth Morgan crusade First published on Werewolf The ghastly likes of Marine Le Pen in France and Geert ... more

Gordon Campbell on the US election outcome

10 Nov 2016 Opinion
Column - Gordon Campbell   Gordon Campbell on the US election outcome Well um.. on the bright side, there (probably)... more

Kiwi Success

Congratulations to Loder Cup winner

26 Sep 2018 People By Hon Eugenie Sage
25 SEPTEMBER 2018 The Loder Cup, one of New Zealand’s oldest conservation awards, has been awarded to Robert McGowan for 2018... more

Appointments to New Zealand National Commission for UNESCO

16 Aug 2018 Appointments
16 AUGUST 2018Appointments to New Zealand National Commission for UNESCO HON JENNY SALESA Associate Education Minister Jenny Salesa is... more

Recruitment

Historic pay equity settlement for education support workers

14 Aug 2018 Recruitment By RT HON JACINDA ARDERN
14 AUGUST 2018Historic pay equity settlement for education support workers RT HON JACINDA ARDERN HON CHRIS HIPKINS Prime Minister The... more

Historic pay equity settlement for education support workers

22 Aug 2018 Recruitment By RT HON JACINDA ARDERN
14 AUGUST 2018Historic pay equity settlement for education support workers RT HON JACINDA ARDERN HON CHRIS HIPKINS Prime Minister The... more