Stocks stone’s throw away from record

Generators help power index higher in moderate trading

Hefty gains in power generators Meridian and Mercury helped drive the New Zealand share market to within a stone’s throw of its record high in moderate trading.

The S&P/NZX50 closed 62.25 points higher at 12719.59, just shy of its record high, set on November 30, of 12768.52.

Traded volume came to 55 million shares, worth $$238 million.

Salt Funds managing director Matt Goodson, noting the index’s proximity to its record, said the market was still reflecting ultra-low interest rates and accommodative fiscal policy here and around the world.

“It’s what happens when you have maximum looseness in fiscal and monetary policy,” he said.

“Whether that continues into 2021 remains to be seen.”

Meridian, the country’s biggest hydro power generator, finished 26 cents higher at $7.00, based on what Goodson said was buying interest from passive investment funds.

The company’s monthly report said South Island hydro storage sat at 112 per cent of average and North Island storage at 107 per cent of average as at November 11.

Compared to October 2019, Meridian said it had experienced doubledigit increased segment sales in all but one of its business segments.

Mercury, which has a 20 per cent interest in Australasian wind farm company Tilt Renewables, rallied 22c to $4.77. Tilt itself continued along its upward path following on from Infratil’s announcement on Monday that it had its majority stake — worth over $1 billion — under review, finishing up 22 at $4.77. Infratil, which specialises in infrastructure investment, closed at $6.08 up 14c.

Cancer diagnostics company

Pacific Edge — one of the market’s strongest performers this year — finished 6c higher at 89c.

“There has been a continuation of the Pacific Edge express train — up another 6 per cent following a bullish broker initiation (from Jarden) a few days ago, which has . . . put a rocket under the stock,” Goodson said.

Rural services firm PGG Wrightson finished up 31c or 10.7 per cent, at $3.19 on the back of a strong earnings outlook.

The group also said its interim dividend would not be less than 10 cents a share.

PGG Wrightson said it was well placed to deliver an operating Ebitda result of around $57m, or around $35m excluding the impact of the new lease accounting standard NZ IFRS 16.

Achievement of a result at this level would represent a 27 per cent improvement on the prior year on a NZ IFRS 16 inclusive basis, or about 50 per cent improvement excluding the standard.

Fletcher Building continued its strong run, up eight cents to $5.84.

Volatile trade in the country’s biggest stock by market cap, Fisher & Paykel Healthcare, continued, finishing at $31.68, down 27c.

Auckland Airport eased back by five cents to 7.94 after a strong runup on Monday.

Among the smaller stocks, medicinal cannabis company Rua firmed 3c to 64c. The shares debuted at 70c — a 20c premium to its 50c issue price — on October 21.