MARKET CLOSE: NZ shares outperform Asia; Contact, Meridian in demand
By Paul McBeth
Sept. 3 (BusinessDesk) - New Zealand shares outperformed Asia as companies offering reliable incomes, such as Contact
Energy and Meridian Energy, remain attractive in a period of heightened global uncertainty.
The S/NZX 50 Index climbed 153.92 points, or 1.4 percent, to 10,953.92. Within the index, 30 stocks rose, 10 fell and 10 were
unchanged. Turnover was $107.6 million.
The local index was one of just five benchmark stock markets tracked by Refinitiv to rise today, with Japan's Topix the
next best, up 0.6 percent in afternoon trading. Wall Street was closed for the Labor Day holiday in the US, leaving
investors to focus on the lingering trade war between the US and China and whether the UK and Europe will resolve
Brexit.
The Reserve Bank of Australia kept its target cash rate at 1 percent today, whereas investors still expect New Zealand's
central bank to cut the benchmark rate later this year. Low rates are a two-fold boon for equities in that they make
dividends more attractive than term deposits or bonds, and they provide cheaper funding for firms to invest.
"We're leading the race today, well and truly. Our friends across the ditch are in negative territory now and we
continue to go upwards," said Peter McIntyre, an investment advisor at Craigs Investment Partners.
Meridian led the market higher, up 5.1 percent to a record $5.33 on a volume of 1.3 million shares, just below its
90-day average of 1.4 million. Contact rose 5 percent to $9.05 with 1.4 million shares changing hands, Mercury NZ rose
2.9 percent to $5.36 and Genesis Energy was up 1.5 percent at $3.50.
Spark New Zealand was the most traded stock on a volume of 2.2 million shares, less than its 3.3 million average. It
rose 1.1 percent to $4.46.
Vista International Group dropped 3.3 percent to $3.80, the biggest decline for the day. About 1.5 million shares
changed hands, more than three times the daily average. The company has been punished since scaling back its growth
projections last week, although notices to the stock exchange show executives have been buying shares on market at the
lower prices.
"Even though the result was pretty good, the market had priced it to perfection and has continued to sell it off,"
McIntyre said.
Of other companies trading on volumes of more than a million shares, Fletcher Building rose 2.5 percent to $4.52, Air
New Zealand increased 0.5 percent to $2.91 and Goodman Property Trust was unchanged at $2.18.
Fonterra Shareholders' Fund units fell 0.6 percent to $3.30, while A2 Milk rose 2.2 percent to $14.16 and Synlait Milk
was up 0.9 percent at $9.38.
(BusinessDesk)