NZX driven higher by stellar performance from Meridian, Pushpay and Pacific Edge
The sharemarket rose as investors bet on a more positive outlook for electricity company Meridian Energy, church technology service PushPay and cancer diagnostic firm Pacific Edge.
The benchmark NZX 50 advanced 0.5 per cent, or 63.573 points, to close at 12,742.59.
“Our market has really been driven today by a stellar performance from Meridian, Pushpay, and Pacific Edge which have been the three main gainers,” said Peter McIntyre, an investment adviser at Craigs Investment Partners.
Pacific Edge, which Cxbladder product detects bladder cancer, was the second-busiest stock traded on Tuesday with 3.34 million shares changing hands.
Pacific Edge rose 7.2 per cent to 89 cents. The shares have jumped 25 per cent this month, but are still shy of their all-time high of $1.63 in February 2014.
Shares in Pacific Edge are in demand after the company rejoined the benchmark in October, prompting investors who track the index to add it to their portfolios.
Adding to the demand, analysts at investment firm, Jarden, published an optimistic outlook for the company last week, following publication of its first-half profits on November 26, saying they expected the share price to double to $1.40 over the next year.
“They have been able to rally strongly since their result and that broker upgrade. That momentum has been carried on into this week,” McIntyre said.
“A number of investors are looking for value and thought that was an opportunity with Pacific Edge.”
Meridian Energy was the most active stock, with 3.6 million shares traded. Meridian gained 3.9 per cent to $7.
Aluminium prices have increased, boosting investor optimism that the Government will breathe fresh life into the Tiwai Point aluminium smelter, underpinning demand for power, McIntyre said.
“Maybe Tiwai, rather than having a staged exit, could be here to stay,” he said.
“That’s why some are buying into that stock. Meridian has had a terrific run over the last few days. It’s been a great performer.”
Other energy stocks also gained, with Mercury NZ up 3.9 per cent to $6.72, Genesis Energy lifting 1.5 per cent to $3.40, and Contact Energy advancing 2.3 per cent to $8.05.
Pushpay, which operates a digital payment platform for religious services, increased 3.3 per cent to $1.90 as the dollar weakened, boosting the outlook for exporters like Pushpay which make most of their sales in United States dollars.
Infratil rose 2.4 per cent to $6.08 after the investment company announced on Monday that it was reviewing its stake in Tilt Renewables. Investors were betting Infratil would generate higher returns from those funds elsewhere, McIntyre said.
Outside of the benchmark index, PGG Wrightson jumped 11 per cent to $3.19 after the rural services company raised its expectation for its full-year pre-tax profit to $57 million, which would be 27 percent higher than last year.