Mainfreight news helps drive sharemarket higher

File photo / NZ Herald

Mainfreight shares rose 5.79 per cent yesterday to a new record as investors expressed confidence the logistics company's latest expansion offshore.

Mainfreight's shares rose 47c to $8.59 after the company said it has agreed to by Netherlands-based transport and logistics firm Wim Bosman Group for an initial purchase price of €110 million ($209 million).

Grant Williamson at Hamilton, Hindin, Greene said that often when New Zealand companies made big acquisitions their share price fell, but Mainfreight was becoming a truly international logistics company.

The share price reaction showed that investors had confidence in Mainfreight's management.

Otherwise, the sharemarket was strong on a day other markets were weak as many investors anticipated that the official cash rate will be cut by the Reserve Bank of New Zealand on Thursday, making investments in shares more attractive.

Many economists are expecting the Reserve Bank will cut the OCR from 3 per cent to 2.5 per cent on Thursday, and yesterday Prime Minister John Key said a cut in the rate would probably help the country.

The benchmark NZX-50 index closed up 11.94 points, or 0.35 per cent, at 3430.05. Turnover was worth $155.75 million. There were 54 rises and 47 falls among the 114 stocks traded.

Xero rose 11c to $2.62 on a day it revealed US expansion plans at an investor day organised by NZX. NZX rose 1c to $1.86.

OceanaGold rose 5c to $3.47 and NZOG rose 2c to $0.90 on a day in which Canadian-listed Tag Oil reported an oil discovery at its onshore Taranaki.

Pumpkin Patch rose 7c to $1.35, while Kathmandu eased 4c to $2.01 and Hallenstein Glassons eased 3c to $3.55.

Pyne Gold Corp rose 1c to $0.30, and SkyCity rose 3c to $3.48.

Fletcher Building rose 3c to $8.84, Contact Energy rose 1c to $6.09 and Telecom eased a cent to $2.15.

Auckland Airport rose 2c to $2.28, Infratil rose 2c to $2.00 and TrustPower rose 1c to $7.13.

Westpac eased 19c to $32.00, Tower eased a cent to $1.97.

In the United States, Wall Street erased most of its weekly gains on Friday (local time) as fears of more geopolitical turmoil and higher oil prices threaten to stifle rallies in coming weeks.

- NZPA