MARKET CLOSE: NZ shares edge up; Genesis gains on thermal advantage, Heartland dips

Thursday 15th June 2017

New Zealand shares edged up in light trading as the lead-up up to the end of the June financial year has investors waiting on earnings updates. Genesis Energy gained as the power company's thermal assets look set to insulate it from low hydro-lake levels, while Heartland Bank followed the Australian banks lower.

The S&P/NZX 50 index increased 32.36 points, or 0.4 percent, to 7,516.35. Within the index, 27 stocks gained, 14 fell and nine were unchanged. Turnover was $121.2 million in a day where 11 stocks reported more than 1 million shares changing hands.

Genesis rose 1.3 percent to $2.345 near a record-high $2.38 it set earlier this month. The electricity generator-retailer is expected to benefit from the low hydro-lake levels in the South Island, meaning its rivals may have to buy its thermal energy in the wholesale market to meet retail demand.

"There might be some underlying support, particularly because of the listed gen-tailers it has a lot more exposure to thermal," said James Smalley, a director at Hamilton Hindin Greene in Christchurch. "Playing in the back of investors' minds is that people are very positive about the recent gas acquisition they made."

Among other power companies, Meridian Energy gained 1.4 percent to $2.95, Mercury NZ increased 0.3 percent to $3.27, and Contact Energy advanced 0.6 percent to $5.14.

Tegel Holdings led the market higher, rising 2.7 percent to $1.13. The poultry company reported an unusually large volume of shares changing hands earlier this week. Spark New Zealand was up 1.9 percent to $3.79, while Z Energy gained 1.5 percent to $7.70 after wrapping up its annual meeting.

Air New Zealand slipped 0.3 percent to $3.185, ending a 22 percent gain since former Prime Minister John Key was named as a director-elect. 3.5 million shares changed hands, marking the biggest volume on the benchmark.

Fletcher Building was unchanged at $7.69 after government figures showed a slowdown in construction activity weighed on economic growth in the first three months of the year. Mainfreight was also unchanged at $22.95 with GDP data showing transport activity shrank in the March quarter.

Dual-listed bank Westpac Banking Corp posted the biggest fall on the day, down 1.4 percent to $32.22 and Australia & New Zealand Banking Group fell 0.9 percent to $29.60. Locally-listed lender Heartland dropped 1.1 percent to $1.76, near the $1.81 record it set in May.

Fisher & Paykel Healthcare was another stock that's been near record highs and fell 0.7 percent to $11.09. Smalley said the breathing apparatus maker had managed to navigate the investor fears about the impact US President Donald Trump may have had on the company's Mexican manufacturing, and also the persistent strength in the New Zealand dollar with F&P Healthcare deriving more than half its revenue in US dollars.

(BusinessDesk)

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