NZ shares get lift from Contact, cable plans
New Zealand shares edged higher this morning, with investor sentiment buoyed by a strong result from Contact Energy and plans for major telcos to collaborate on an Auckland-Sydney fibre cable.
The NZX 50 Index rose 4.2 points, or 0.1 per cent, to 4,218.67 in the first 30 minutes of trade. Contact Energy led gainers, and Auckland International Airport fell.
The New Zealand dollar recently traded at US84.52 cents, almost unchanged from US84.53c at 8am and up from US84.41 at 5pm yesterday.
Reporting season continued to chug along this morning with a solid result from Contact Energy. The Wellington-based power firm reported a half-year profit of $88 million, up more than 29 per cent on the same period last year.
Operating earnings were up 9.5 per cent to $253 million, meeting analysts' forecasts. The company's stock rose 2.4 per cent to $5.20 on the news.
Telecom and Telstra helped to push the benchmark index higher after announcing plans to build a US$60m ($71m) under-sea cable linking Auckland and Sydney, in conjunction with Vodafone.
The fibre link will have a capacity of 30 terabits per second, or roughly 300 times the current internet data demand out of New Zealand. Telecom rose 0.7 per cent to $2.27, and Telstra rose 0.5 per cent to $5.74.
Freightways was right behind market leader Contact Energy, recovering 1.1 per cent to $4.50. Yesterday the courier company's stock fell despite its half-year profit hitting a record high of $21m on growth in its package delivery business.
SkyCity also saw modest gains, up 0.3 per cent to $4.03. Prime Minister John Key said this morning he wanted to get on with negotiating the convention centre deal with the casino operator, after claiming the Government's tendering process had been vindicated by a long-awaited Auditor-General report.
Auckland International Airport led decliners, down 1.1 per cent to $2.73. TrustPower, the electricity company controlled by Infratil, fell 1.1 per cent to $8.21.
Securities market operator NZX fell 0.8 per cent to $1.26, dogged by yesterday's 32 per cent drop in full year profit as higher staff costs and expenses coupled with a dearth of new listings.
Auckland electricity and gas supplier Vector fell 0.7 per cent to $2.82.