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NZ shares back at record highs

NZ NewswireNZ Newswire 22/08/2016 Jonathan Underhill

New Zealand shares rose, pushing the NZX 50 Index to a new record, as a lack of negative surprises during earnings season ensured ongoing demand for the market's relatively high yields. Genesis Energy, Metro Performance Glass and A2 Milk gained.

The S&P/NZX 50 Index gained 56.91 points, or 0.8 per cent, to 7,462.16. Within the index, 28 stocks rose, 15 fell and eight were unchanged. Turnover was $161 million.

"The path of least resistance has been up," said Greg Smith, head of research at Fat Prophets. "If you look at the lower-for-longer interest rate environment, equities are going to continue to win the beauty prize."

New Zealand has had "a reasonable earnings season" and has an economy that's performing "quite resiliently", especially given the impact of a weak dairy sector and a high kiwi dollar, he said.

Genesis rose 3.9 per cent to $2.25, leading the index higher. The company reports on Wednesday and is expected to post a normalised full-year profit of $83.7 million from $81.8 million a year earlier, according to brokerage Forsyth Barr. Meridian Energy, which rose 1 per cent to $2.93, also reports on Wednesday and is forecast to post a 12 per cent gain in profit to $233.5 million on strong inflows into hydro lakes.

Among other utilities, Mercury NZ gained 1.3 per cent to $3.04 ahead of its results on Tuesday, and Vector rose 1.2 per cent to $3.53 before its results on Wednesday.

MetroGlass, which is on a March 31 financial year, rose 3.5 per cent to $2.08. Ryman Healthcare gained 2.8 per cent to $9.66 and Metlifecare, which reports Wednesday, gained 1.7 per cent to $6.04.

A2 Milk rose 2.8 per cent to $2.24, Spark rose 2.6 per cent to $4, a 10-year high.

GeoOp fell 3.6 per cent to 27 cents after the human resources software developer said director Mark Weldon would leave the board at the end of the month to be replaced by an Australian director.

Heartland Bank rose 2.7 per cent to $1.54. Last week the lender posted a 12 per cent gain in annual profit and announced a bigger dividend after benefitting from low interest rates, which gave it access to cheaper funding.

Fletcher Building climbed 1.5 per cent to $10.53 and Kathmandu Holdings rose 1.5 per cent to $2.03.

Sky TV, which reports on Friday, was the biggest decliner, dropping 2.3 per cent to $4.77.

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