Index moves a boost for Fletcher, Mercury NZ

New Zealand shares gained as Fletcher Building and Mercury NZ rose on the back of their inclusion in the MSCI New Zealand Index.

The S&P/NZX50 index rose by 81.92 points, or 0.8 per cent, to 10876.98. Within the index, 24 stocks rose, 20 fell, and six were unchanged. Turnover was $216.5 million.

“It was a risk-on day with international markets strong,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. The Dow Jones Industrial Average rose 0.6 per cent to 27,674.80 and other international markets followed suit.

Fletcher Building drove the NZX50 higher, trading up 5.6 per cent at $5.11. The shares have gained about 12 per cent this week on strong volumes. More than 6.5 million shares changed hands, making it the day’s volume leader. Some investors had expected Fletcher to be excluded from the

MSCI index, which was reweighted yesterday. Institutional investors tracking those indices then have to match their portfolios to the changes.

Mercury was added to the global share index and traded up 3.1 per cent at $4.92 as a result.

Pushpay Holdings extended recent gains, rising 3.8 per cent to $3.55 and taking this week’s gain to more than 12 per cent. Earlier this week it reported a US$6.5m ($10.2m) net profit for the six months ended September, a turnaround from the previous first-half ’s US$4.4m net loss.

Vista Group International and Meridian Energy also made gains, with the cinema software firm’s price rising by 1.3 per cent to $3.83 and the electricity company up 2.1 per cent at $4.65.

Ryman Healthcare led retirement village operators higher, up 2.6 per cent at $13.59. Summerset Group rose by 2.2 per cent to $6.86 while Oceania Healthcare was up by 1.9 per cent at $1.05.

“The retirement village operators are in strong demand, going higher off the back of a rebound in Auckland house prices,” McIntyre said.

Demand for equities was being driven by funds being diverted from bonds into stocks, as well as a belief the US-China trade war would be resolved in the next month or so, McIntyre said.

Trustpower posted the day’s biggest fall, down 6 per cent at $7.65, while a2 Milk fell by 1.4 per cent to $12.39.

Outside the main index, shares in New Zealand Oil and Gas declined by 9.7 per cent to 65c as it said 40 per cent of shares held by minority investors had been voted on its takeover deal. Of those 48.4 per cent were against the transaction. The Shareholders’ Association will vote its proxies against the deal.