MARKET CLOSE NZX heads higher on positive Fonterra result

New Zealand shares rose, with units of the Fonterra Shareholders’ Fund gaining strongly as the multi-national, Auckland-based dairy cooperative announced better than expected half year results.

The NZX 50 Index rose 66.032 points, or 1.52 percent, to 4,412.059 . Within the index, 31 stocks gained, 13 fell and six were unchanged. Turnover was $98.78 million.

Fonterra units rose 5.67 percent percent to $7.45, having touched $7.50 earlier in the day. The units are now at levels not seen since January before the DCD residues scare in China, which knocked investor confidence.

Market activity was almost entirely driven by the Fonterra result, said James Lee at First NZ Capital.

“It was the only news today,” he said, citing a “drag-along effect in capital markets” where improvement in one heavyweight stock leads to a re-rating in others. “Often when leaders perform, others correlate.

Book-squaring and relatively light trading in preparation for both the end of the first quarter and the end of the financial year on March 31 for many institutions would also have affected trading patterns, Lee said.

“To be frank, there hasn’t been anything today that would give any confidence that it should on going up.”

Among leaders, Fletcher Building was up 3.25 percent to $8.58, Contact Energy rose 2.16 percent to $5.67, Auckland International Airport rose 2.82 percent to $2.92, and Telecom was up 4.27 percent to $2.32. The deregulated telecommunications retailer announced basic consumer ultra-fast broadband pricing at $95 a month.

Registrants for the MightyRiverPower partial privatisation also today received the latest update from the Treasury’s registration portal, saying offer documents were expected to be ready in mid-April for listing in the first half of May.

The state-owned electricity company today confirmed its founder chief executive, Doug Heffernan, will see out the financial year to June 30, 2014 and that a replacement search will begin late this year. Heffernan triggered a $500,000 retention payment by staying on, to add to his approximately $1.5 million annual salary, including bonuses.

Michael Hill reversed losses from the day before, climbing 5.43 percent percent to $1.36.