Soaring Meridian leads market higher
Meridian Energy was as unstoppable as Kane Williamson in Christchurch with the electricity gentailer’s shares soaring to fresh highs on the first day of trading for 2021.
The stock closed at $8.59, up a whopping 15.84 per cent, helping push the New Zealand sharemarket 2.1 per cent higher on an otherwise quiet day to kick off the new year.
By the time Williamson notched up his fourth test double century against Pakistan, Meridian’s market value had passed $22 billion, having cracked the $20b mark last week. “It’s a continuation of the interest shown in the stock by clean energy ETF funds adopted over the Christmas break,” Milford Asset Management portfolio manager Sam Trethewey said, noting Contact Energy was also sharply higher. “Demand for Contact and Meridian continues to remain strong regardless of the holiday period which is typically driven by offshore closes.”
Mercury NZ and Genesis Energy were also in demand, their shares up 3.37 per cent and 2.07 per cent at $6.75 and $3.70 respectively.
The S&P/NZX 50 Index climbed its own new heights to 13,367.65, up 276.01 points (2.11 per cent). Across the main board there were 77 gainers and 74 decliners on volume of 60.4m share transactions worth $177.7m.
“Generally at the moment we are seeing assets highly sought-after by investors,” Trethewey said.“The local housing market is one form of that, the sharemarket is another form of that. The willingness at the moment for investors or the market to look through any short-term earnings bump due to Covid seems to be still reasonably high. It would have to be something unexpected, or a change in view from central banks which would throw the market off its current course.”
Infratil shares gained 20c or 2.74 per cent to $7.50 after the company disclosed an updated valuation of its investment in CDC Data Centres, showing a near $500m gain over three months. Infratil, which is defending a $5.37b takeover bid from AustralianSuper, said its 48.1 per cent stake is now worth up to A$2.3b ($2.45b).
Trethewey said it wasn’t surprising to see Infratil highlighting assets in its portfolio, given its rejection of AustralianSuper’s bid. He said corporate activity will be a feature of equity markets this year. “The offer for Infratil might be the first of several, given the amount of cash out there looking for large assets to find a home.”
Infratil’s share price is trading above the indicative takeover bid, making it difficult to see the offer succeeding, he added.
Among some of the other large cap stocks, Fisher & Paykel Healthcare gained 0.85 per cent to $33.25, a2 Milk was up 10c (0.83 per cent) at $12.17 and Mainfreight was up 0.27 per cent at $69.69.
Fletcher Building fell 1.69 per cent to $5.80. Pacific Edge, fell 4.10 per cent to $1.17.
Shares in software company Ike surged 9.26 per cent to $1.18 after the company said it had inked a deal to buy certain assets of Visual Globe’s AI platform for an initial payment of US$3.3m in cash and a potential earnout component of up to US$4.99m ($6.91m) cash and up to US$2.1m of IKE shares. Colorado-based Visual Globe’s software platform utilises machine learning across imagery for feature extraction, enabling it to analyse high volumes of pole data.