Energy firms in demand as market hits record

New Zealand shares rose to a record as the prospect of low interest rates for even longer stoked demand for companies offering regular income such as Meridian Energy and Mercury NZ. Synlait Milk extended its recovery from a weak first-half result earlier this week.

The S&P/NZX 50 index climbed 89.68 points, or 0.9 per cent, to a record 9550.99. Within the index, 36 stocks gained, 10 fell, and four were unchanged. Turnover was $106.7 million, with just five companies trading on volumes of more than a million shares. Companies offering stable dividends remain in vogue among investors as the Federal Reserve’s flatter interest rate track continues to support yield stocks such as utilities and property companies.

“The world is now in a seemingly benign and low-interest-rate environment,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. “Low interest rates are like sugar for the market and we’ve seen that today.”

The electricity generator-retailers were all beneficiaries, with Mercury hitting a record $3.80 and closing at $3.79, a 3.6 per cent gain. Meridian also reached a record at $4.09. It closed at $4.08, up 3.2 per cent, on a volume of 2.5 million shares. Contact Energy rose 2.6 per cent to $6.60 on a volume of 2.2 million, having hit a 10-year high of $6.64 during the day. Genesis Energy was up 2.4 per cent at $2.96 and was another to break new ground at $2.97.

Trustpower increased 1.4 per cent to $6.38, and its cornerstone shareholder, Infratil, was up 2.5 per cent at $4.035.

Synlait Milk led the market higher, up 5.1 per cent at $10.53. The milk processor is bouncing back from a 14 per cent slump on Wednesday when it reported a drop in firsthalf earnings. Air New Zealand rose 4 per cent to $2.32 and is another stock that’s been under pressure since it issued a profit warning in February.

A2 Milk increased 0.7 per cent to $13.81 on a smaller volume than usual of 628,000 shares. Fonterra Shareholders’ Fund units rose 0.5 per cent to $4.22.

Spark New Zealand was the most active stock with volume of 3 million. It rose 1.1 per cent to $3.58. Sky Network Television increased 0.7 per cent to $1.36 on a volume of 1.5 million. Auckland International Airport

increased 0.5 per cent to $7.885 on a volume of 1.1 million. Summerset Group posted the biggest decline on the day, down 2.4 per cent at $6.51.