Thursday 22nd March 2018
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New Zealand shares were mixed, with Trustpower and Infratil both rising after retaining a market advantage in Tauranga while Heartland Bank and Freightways dropped.
The S&P/NZX 50 Index dipped 7.48 points, or 0.09 percent, to 8,600.81. Within the index, 23 stocks rose, 19 fell and eight were unchanged. Turnover was $142 million.
"Our market was very strong yesterday, there was quite significant buying across the leaders and that has pulled back a little today in most but not all," said Matt Goodson, managing director at Salt Funds Management. The benchmark index surged 1.4 percent yesterday to a record.
Trustpower jumped 7.7 percent to $5.60, a two-month record, making it the best performer. The Tauranga Electricity Consumer Trust has abandoned plans to become a funder for Bay of Plenty community projects after strong pushback from customers of locally headquartered Trustpower, who prefer to receive an annual cheque that helps offset their personal power bills.
The decision effectively entrenches Infratil-controlled Trustpower's competitive advantage in the Tauranga electricity network area because only Trustpower customers are eligible for the annual cheque, worth between $400 and $500 in most years. The trust had considered becoming a community projects funder but dropped the idea after considering some 21,000 written submissions.
Trustpower's shares dropped when the trust, which owns 26 percent of the company, proposed ditching the rebates in January, and Trustpower's chief executive said it would take legal advice on the matter.
"It's definitely the highlight of the day, and interesting the trustees did withdraw the proposal," Goodson said. "It's very clear that beneficiaries of the trust, while they receive an annual cheque, are being charged significantly above market levels for electricity in the area. They need to buy off Trustpower to keep getting that cheque, so it's an unusual historical arrangement. The trustees were certainly on the right track, but clearly, they've felt compelled to withdraw what seemed to be a sensible proposal."
Infratil gained 1.8 percent to $3.14.
Heartland Bank was the worst performer, down 2.2 percent to $1.78, with Freightways falling 1.8 percent to $7.54 and Ryman Healthcare down 1.4 percent to $10.95.
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