MARKET CLOSE: NZ shares at record, Westpac and ANZ lead gains while Contact drops

Wednesday 19th July 2017

New Zealand shares rose to a fresh record, led by Westpac Banking Corp and Australia & New Zealand Banking Corp on positive regulatory news out of Australia, while Contact Energy fell after weaker monthly statistics.

The S&P/NZX50 Index rose 18.44 points, or 0.2 percent, to 7,725.77. Within the index, 32 stocks rose, 11 fell and seven were unchanged. Turnover was $151 million.

The dual-listed banks led the index's gains today, with Westpac up 4 percent to $34.43 and ANZ rising 3.9 percent to $31.70. The Australian Prudential Regulation Authority (APRA) today released its new "capital adequacy" targets and will require a 150-basis-point increase in the minimum safety reserves that must be held by the big four banks there. The banks will need to lift Tier 1 equity ratios to 10.5 percent by January 2020.

"We've had a relief rally in the sector, all the banks in Aussie have traded up materially higher," said Peter McIntyre, investment adviser at Craigs Investment Partners. "Most of the main banks are probably near that mark currently."

CBL Corp gained 2.9 percent to $3.52, Port of Tauranga rose 2 percent to $4.54 and Genesis Energy gained 1.6 percent to $2.51.

Property stocks have continued gains after yesterday's inflation numbers which gave the market confidence that the Reserve Bank won't lift interest rates anytime soon, McIntyre said. Investore Property rose 1.5 percent to $1.39 and Stride Property gained 1.2 percent to $1.71.

"Our market is very interest-rate sensitive and does tend to like lower interest rates, it's really a dividend yielding exchange so that's been positive for them and there has been good volume running through the property sector today," McIntyre said

Contact Energy was the worst performer, down 1.3 percent to $5.19.

"We are trading to the upside again today, news has predominately been driven by Contact which had its monthly operational report," McIntyre said. "It was a bit of a mess really, the hydro production relative to PCP was materially soft and the South Island remains very dry, storage levels are around 56 percent of the long-run average and the near term outlook is more of the same. It looks like July is going to stack up as another poor month for Contact, those numbers were weak."

A2 Milk fell 1.3 percent to $3.95 and Air New Zealand dropped 1.1 percent to $3.47.

Outside the benchmark index, GeoOp remained suspended at 22 cents. The unprofitable management app developer, plans a two-for-one share consolidation aimed at lifting the price of its stock enough to qualify for an ASX listing. GeoOp's shares were suspended from trading on June 29 and will remain until either GeoOp formally delists or cancels its plan to move to the ASX.

(BusinessDesk)

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