New Zealand shares gained as Contact Energy and Heartland Bank rose on positive earnings, while Freightways dropped on concern over margin pressure. Opus International Consultants soared on the prospect of a takeover.
The S&P/NZX50 Index rose 42.83 points, or 0.6 per cent, to 7,761.94. Within the index, 27 stocks rose, 17 fell and six were unchanged. Turnover was $123 million.
Contact led the benchmark higher, rising 3 per cent to $5.54. The electricity generator-retailer reported a 10 per cent fall in underlying earnings to $141m for the year to June 30. The company also announced it would be moving to a new dividend policy with payouts based on 80-to-90 per cent of free cash flow which would let it make larger returns than under the existing policy.
"It could be said the result was a disappointment but it was well signalled, the market has said it has been known for a while that hydro storage in the South Island has been very low," said Peter McIntyre, investment adviser at Craigs Investment Partners. "The outlook for 2018 is very positive, it's based around cost reduction, retail price increases and better distribution of cash. The market has really taken that on board - the result was well signalled but the outlook probably wasn't, hence the reaction today."
Genesis Energy rose 2.9 per cent to $2.47 while Fletcher Building gained 1.8 per cent to $8.06.