Shares jump on Aust takeover action and Wall St run

The New Zealand sharemarket ended the week with a one per cent surge, fuelled by banking and building materials takeover activity in Australia and the bull market on Wall Street.

The S&P/NZX 50 Index momentarily reached a mid-morning low of 11,786.35 but then climbed steadily to close at 11,923.72, up 119.79 points or 1.01 per cent — its highest close in five weeks.

The index gained 1.5 per cent for the week and is now up 1.3 per cent so far this year.

There were 94 gainers and 33 decliners over the whole market on volumes of 26.06 million share transactions worth $123.91m

Matt Goodson, managing director of Salt Funds Management, said the local market took leads from the

United States and Australia which traded strongly. Merger and acquisition activity was continuing to light up the Australian market.

The S&P/ASX 200 Index has risen 1.04 per cent to a new high of 7844.3 points at 5.45pm NZT.

The Australian market came alive with a NZ$6 billion takeover offer by Nationwide Building Society to buy ASX-listed Virgin Money UK, which climbed 32.7 per cent to A$4.075 ($4.37).

Building materials company CSR and cement maker Boral are also involved with billion-dollar takeover bids.

On Wall Street, Nasdaq Composite rose 1.51 per cent to 16,237.38 points; S&P 500 was up 1.03 per cent to

5157.36; and Dow Jones Industrial Average gained 0.34 per cent to

38,791.35.

The Virgin Money activity spurred fellow banks listed on the New Zealand market. ANZ was up 65c or 2.08 per cent to $31.95; Westpac increased 76c or 2.64 per cent to $29.60; and Heartland Group gained 5c or 3.97 per cent to $1.31.

Fletcher Building added 12c or 2.87 per cent to $4.30 following reports that it is holding mediation talks in Western Australia over the Iplex pipe issue.

Goodson said it’s strange that the leaking pipes were only in Western Australia and not in other states. It might be a case of installation, but it would be a good sign if Fletcher can reach some outcome and avoid the worst situation of a product recall, which would be expensive.

Ebos Group was up 57c to $36.90; a2 Milk climbed a further 20c or 3.16 per cent to $6.53; Chorus gained 17.5c or 2.22 per cent to $8.05; Comvita increased 9c or 4.04 per cent to $2.32;

Freightways collected 16c or 1.91 per cent to $8.54; and Gentrack added 12c to $7.92.

Market leader Fisher & Paykel Healthcare was up 42c to $24.88. In the energy sector, Mercury rose another 9.5c to $7.10 and Meridian was up 7.2c to $5.96.

Skellerup Holdings was up 10c or 2.3 per cent to $4.45; Vulcan Steel increased 19c or 2.35 per cent to $8.27; Steel & Tube gained 2c.