Meridian Energy shares keep on defying gravity

Investors appeared to ignore today's extreme political turmoil in Washington DC while banking the fact that the Democratic Party now controls the presidency, and both Houses of the US Congress following wins in yesterday's Georgia state Senate run-off election. 

The S&P/NZX 50 Index rose 151.74 points, or 1.1 percent, to 13,485.67. Within the index, 24 stocks rose, 19 fell and seven were unchanged. Turnover was $209.6 million.

With respect to the surge in Meridian's share price, it is understood that offshore exchange traded funds are buying Meridian  and Contact Energy, which are heavily weighted in clean energy indices. The two stocks make up almost 10 percent of a clean energy index built by S&P/Dow Jones.

“The utilities are not being driven by decisions made by active investors, they are driven by a flow of money from clean energy ETFs,” said Mark Lister, head of private wealth research at Craigs Investment Partners.