Manawa Energy soared 28% after the Commerce Commission cleared Contact Energy to buy the electricity generator in a deal that looked shaky at times, leading the local stock market higher.
The S&P/NZX 50 index joined a rally across Asia, with China and the US back on talking terms and ready to seek out a deal to mitigate President Donald Trump’s harsh tariff regime. Vista Group International bounced back from Tuesday’s Hollywood tariff slump.
Napier Port rallied on the prospect of rejoining the benchmark index once Manawa departs, and Briscoe Group is being touted as a potential new candidate to replace arch-rival Warehouse Group in the next rebalancing.
Meanwhile, Statistics New Zealand figures showed the unemployment rate didn’t creep higher in the March quarter as some analysts had thought, while the Reserve Bank noted the growing risk tariffs pose to the nation’s financial health.
Let’s talk
The NZX50 climbed 75.8 points, or 0.6%, to 12,496.89, with 32 stocks gaining, 15 declining and three unchanged. Turnover across the main board was $144.2 million.
The local bourse joined a broadly stronger day across Asia as the US and China prepare to start trade talks to cool global tensions, while China’s central bank said it will cut interest rates and officials pledged to keep supporting domestic stock markets.
Australia’s S&P/ASX 200 index was up 0.4% in late trading, while Hong Kong’s Hang Seng advanced 0.6% and Japan’s Nikkei was up 0.1%. US futures are pointing to a 0.6% increase for the S&P 500 overnight.
Manawa led the local market higher, climbing $1.34 to $6.19 after the Commerce Commission cleared Contact to buy the smaller electricity generator in a cash-and-scrip deal. Contact fell 1.6% to $8.99, while Infratil – a major shareholder of Manawa – gained 0.8% to $11.675.
“The Commerce Commission’s 50/50 call has given them the go ahead, although it’s not quite done and dusted yet with some formalities required,” said Peter McIntyre, an investment adviser at Craigs Investment Partners.
Napier Port is expected to replace Manawa once the electricity generator leaves the NZX50, and the port operator gained 6.1% to $2.78, hitting a two-year high $2.79 during the day.
Best buds
Meanwhile, Briscoe Group gained 2.8% to $4.44 after the retailer reported a decline in first-quarter sales.
McIntyre said there’s speculation Briscoe may replace Warehouse Group in the next NZX50 index rebalancing in June. Warehouse dropped 2.5% to 79 cents, posting the biggest decline on the benchmark index.
Vista bounced back from the movie tariff selloff, climbing 7.4% to $3.65, while rubber goods maker Skellerup gained 3.1% to $4.35 and Tourism Holdings advanced 3.1% to $1.34.
Spark New Zealand rose 2.6% to $2.15.
Kiwi Property Group was the most heavily traded stock on a volume of 6.1 million shares as it fell 1.7% to 86 cents. Precinct Properties NZ declined 0.9% to $1.14. Both commercial landlords have experienced heavy trading in recent weeks.
Not so close
NZME rose for a second day, up 0.9% at $1.14 after the Takeovers Panel cleared activist shareholder Jim Grenon of breaching the Takeovers Code, while noting he had acted in concert with fellow shareholder Caniwi Capital in his proposal to replace the board.
The kiwi dollar held its gains, trading at 60.01 US cents at 5pm in Auckland 60.07 cents at 7am, and 59.81 cents yesterday.
Stats NZ figures showed the unemployment rate was unchanged at 5.1% in the March quarter, with softer wage growth than expected and a decline in the participation rate.
Meanwhile, the Reserve Bank’s six-monthly financial stability report showed risks to the health of the nation have heightened due to the global trade environment, but that the country’s lenders are well positioned to support the economy if things deteriorate.
And Bank of New Zealand reported a flat first-half result, while parent National Australia Bank eked out a 1% increase in earnings.
Reporting by Paul McBeth. Image from Curious News.
