New Zealand shares edged higher as Mercury NZ's decision to press ahead with the second stage of what will be the country's biggest wind farm had some investors revisiting their fears of the energy-hungry Tiwai Point smelter closing.
The S&P/NZX 50 Index increased 6.52 points, or 0.1 per cent, to 10,926.31. Within the index, 23 stocks rose, 19 fell and eight were unchanged. Turnover was $140.4 million.
Mercury, which will join the MSCI New Zealand Index later this month, today announced it will go ahead with a $208m southern element of a planned wind farm at Turitea. Chief executive Fraser Whineray said the smelter's closure by 2030 was always considered likely and didn't change Mercury's view on investment risk. The shares rose 0.8 per cent to $4.98 on a volume of 1.7 million shares, more than its 90-day average of 998,000.
Meridian Energy, the smelter's primary supplier, increased 1.7 per cent to $4.72 with 2.8 million shares changing hands, more than its 1.6 million average. The response wasn't universal, given the new wind farms will also compete with the other generator-retailers. Contact Energy fell 1.2 per cent to $7.15 on a volume of 1.2 million and Genesis Energy dropped 1.5 per cent to $3.25.
Peter McIntyre, an investment adviser at Craigs Investment Partners, said the decision had surprised some investors given the uncertainty around the Tiwai Point smelter's future.