NZ shares rise as MSCI reweighting drives mammoth volume

Tourism Holdings CEO Grant Webster. Photo / File

The S&P/NZX 50 Index rose back above 11,000 as the official MSCI New Zealand Index reweightings drove more than half a billion dollars of activity in the market's busiest day for almost a year-and-a-half.

New Zealand's benchmark index advanced 90.87 points, or 0.8 per cent, to 11,044.54. Within the index, 37 stocks rose, 12 fell, and one was unchanged. Turnover was $626.2 million, with 116.4 million shares traded, the most since May 31, 2018.

The volume was driven by the MSCI index reweighting, which added Mercury NZ to the benchmark tracked by international institutional investors. Mercury fell 3.1 per cent to $4.68, with 52.6 million shares traded, swamping its 90-day average of 1.2 million.

Fletcher Building kept its slot in the index when some investors had speculated its woes in recent years might have seen it dropped. The country's biggest construction firm rose 2.5 per cent to $5.35, with 6 million shares traded, well up on its 1.8 million average.

Meridian Energy, the country's biggest listed company, rose 1.7 per cent to $4.40 on a volume of 12.6 million shares, compared to its 1.7 million average.

Peter McIntyre, an investment adviser at Craigs Investment Partners, said the index reweightings can shift prices and volumes.

"They're driving bigger volumes and driving investment direction as well. Once you get included in that, you're going to get picked up," he said.

Spark New Zealand, which usually averages 3 million shares, rose 2.4 per cent to $4.545 on a volume of 5.9 million shares. Auckland International Airport was down 2.1 per cent at $9.01 on a volume of 5.2 million shares and Contact Energy rose 3.2 per cent to $7.06 with 3.8 million shares traded.

Of stocks trading on volumes of more than 2 million shares, Infratil climbed 4.2 per cent to $4.97, Ryman Healthcare fell 1.5 per cent to $14.22 and Kiwi Property Group increased 0.3 per cent to $1.555.

Fisher & Paykel Healthcare slipped 0.5 per cent to $20.77 on a volume of 2 million shares, well up on its 635,000 average. The breathing mask maker is due to report first-half earnings tomorrow and McIntyre said investors would be watching to see whether it retained a conservative outlook or upgraded its guidance.

Z Energy rose 3.8 per cent to $4.98 on a volume of 1.7 million shares. The transport fuels retailer was boosted by ASX-listed Caltex Australia receiving an A$8.6 billion ($9b) takeover offer from Canada's Alimentation Couche-Tard.

McIntyre said the offer was a reminder to investors that Z Energy's dividend yield was attractive at 13 per cent.

"Some see it as a sunset industry but that sun's going to take a while to come down," he said.

Tourism Holdings led the market higher, up 6.8 per cent at $3.29 as it came off a two-year low. Chair Rob Campbell bought shares on market yesterday at $3.05 a share.

Sky Network Television was up 6.3 per cent at 85 cents, having hit an all-time low last week.

Westpac Banking Corp rose 1.9 per cent to $26.30 after the dual-listed lender said chief executive Brian Hartzer would leave at the end of the week over the breaches of anti-money laundering legislation. Chair Lindsay Maxsted also brought forward his retirement to next year.

Argosy Property posted the day's biggest decline, down 3.3 per cent at $1.32 on a volume of 1.3 million shares, more than twice its 531,000 average.

Outside the benchmark index, Green Cross Health dropped 6.8 per cent to $1.09 after it reported a 3 per cent decline in first-half profit and weaker revenue.

Allied Farmers rose 4.4 per cent to 72 cents after the board declared a 2 cents per share dividend at today's annual meeting.

AFT Pharmaceutical was up 1.6 per cent at $3.15 after announcing a licensing agreement for its Maxigesic painkiller to launch in Canada next year.

ArborGen rose 3.3 per cent to 18.9 cents after it reported a 46 percent lift in first-half revenue and a net loss of US$3m ($4.6m).