NZX extends trading hours for S&P Global Index change

The NZX ticker on the building downtown Supplied 19 OCT 2015 HBG 08Dec15 - COMPETITIVE: Lower than hoped customer numbers aren't helping, but Contact's cash flows are still good, an adviser says.

The NZX is extending its trading hours by 45 minutes today to accommodate changes arising from the rebalancing of the S&P Global Clean Energy Index.

NZX Product Operations said the "adjust" trading session on the exchange's X-stream trading platform would be extended for the NZX main board, debt market, and the Fonterra Shareholders' market.

"This amendment has been made to accommodate the rebalance of the S&P Global Clean Energy Index," NZX said.

Trading normally finishes at 5pm.

Heavy trading is expected to occur in Meridian and Contact Energy when the index changes take effect as they will see their weightings reduce substantially.

Trade in Contact and Meridian has already been volatile in advance of the change.

BlackRock - the world's biggest asset manager - has two iShares clean energy exchange traded funds (ETFs) which have amassed big stakes in Meridian and Contact. Both funds track the S&P Dow Jones Global Clean Index.

S&P will add 51 stocks to the index, which currently comprises just 30 green energy stocks.

There will also be modifications to the index's constituent weightings scheme.

It is understood that Contact's weighting will fall from 4 per cent to just under 0.7 per cent and Meridian's will go from 4.5 per cent to just over 0.7 per cent.

Shares in the Kiwi power generators had been highly sought following the election of US President Joe Biden on the expectation that the new administration would take strong action on climate change, which put the low-impact power companies in the spotlight.

S&P's index rebalancing has been one of the most anticipated events on the market for some time.

Going on NZX disclosures issued in January, BlackRock had 14.34 per cent of Contact and 7.09 per cent of Meridian.

With a combined market capitalisation of nearly $19 billion, both companies have substantial influence on the local benchmark index, the S&P/NZX50.

Meridian and Contact hit $9.40 and $10.75, respectively, in early January but have come back sharply since then, trading today at $5.86 and $7.56.