Gentailers dominate trade; Mercury wind farm has investors revisiting smelter fears
The S&P/NZX 50 Index increased 6.52 points, or 0.1 percent, 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 $208 million 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 percent 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 percent 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 percent to $7.15 on a volume of 1.2 million and Genesis Energy dropped 1.5 percent 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.
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