NZ shares shrug off Middle East tensions; Infratil gains

Protesters demonstrate over the US airstrike in Iraq that killed Iranian Revolutionary Guard Gen. Qassem Soleimani in Tehran. Photo/AP

New Zealand shares were one of the outliers across Asia, shrugging off heightened tensions in the Middle East and higher oil prices. Infratil rose on a sharp lift in the value of its data centre investment.

The S&P/NZX 50 Index increased 34.18 points, or 0.3 per cent, to 11,627.32. Within the index, 16 stocks rose, 24 fell, and 10 were unchanged. Turnover was $110.8 million, with trading relatively quiet in the first day back from the Christmas and New Year holiday period.

Stocks across Asia were largely weaker as investors digested the heightened rhetoric between the US and Iranian administrations after last week's fatal drone attack on Iranian general Qassem Soleimani. Japan's Nikkei 225 Index dropped 1.9 per cent in afternoon trading, Australia's S&P/ASX 200 Index was flat and Hong Kong's Hang Seng was down 0.7 per cent.

The escalating tensions drove government bond yields lower, making the reliable dividends available on New Zealand's stock market more attractive. The local market got a late boost heading into the close as blue-chip stocks offering reliable dividends remained in demand.

Matt Goodson, managing director at Salt Funds Management, said he was surprised the NZX hadn't followed the global markets as closely. But trading was quiet and New Zealand's stock market was sensitive to bond yield movements.

"Our market has largely shrugged it off although I wouldn't get too focused on some of the price movements as liquidity is still very sparse," Goodson said.

Infratil hit a record $5.26 and ended the day up 3.5 per cent at $5.20 on a volume of 655,000 shares, in line with its 90-day average of 661,000. The infrastructure investment firm said the independent valuation of its 48 percent stake in CDC Data Centres rose by as much as $700 million in the latest year, which meant manager Morrison & Co would receive a bigger incentive fee.

Goodson said it was a double-edged sword for Infratil investors, because while the increased valuation was backed by strong future cash flow, it crystallised the performance fee for the manager.

Among other utilities and blue chips to gain, Genesis Energy rose 2.8 per cent to $3.10, Mercury NZ was up 1.6 per cent at $5.11, Meridian Energy increased 0.4 per cent to $5, and Auckland International Airport was up 0.3 per cent at $9.21.

Fisher & Paykel Healthcare rose 2 per cent to $22.65.

Hard commodity prices rose with Brent crude oil up 3 per cent at US$70.67 a barrel, the highest level since late May, while gold was up about 1.7 per cent at US$1,578 an ounce. Mining and energy explorers and producers were stronger in Australia, while domestically, New Zealand Oil & Gas rose 10.2 per cent to 70 cents.

Tourism-related stocks were weaker, with RV rental operator Tourism Holdings down 3.5 per cent at $3.33 on a volume of 155,000 shares, and national carrier Air New Zealand falling 3 per cent to $2.96 with 363,000 shares changing hands.

New Zealand Refining was down 1.6 per cent at $1.85, and Z Energy decreased 0.9 per cent to $4.41 on a volume of 1 million shares.

Metlifecare was the most traded stock on a volume of 4.1 million shares. The company is under a takeover offer at $7 a share and the stock was unchanged at $6.85. The $1.5 billion bid has supported other retirement village operators. Ryman Healthcare was up 1.1 per cent at $18.18 and Summerset Group rose 1 per cent to $8.99.

Of other companies trading on volumes of more than a million shares, Kiwi Property Group increased 0.3 per cent to $1.56 and Argosy Property was unchanged at $1.37.