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Renewable energy stocks begin final descent

Renewable electricity stocks tumbled as investors reacted to a new version of a clean energy index, announced on Good Friday, that will reduce the weighting of Meridian and Contact.

Tuesday, April 6th 2021, 6:40PM

by BusinessDesk

The S&P/NZX 50 Index fell 87.83 points, or 0.7%, to 12,400.48. Within the index, 20 stocks fell, 19 rose and 11 were unchanged. Turnover was $193.2 million.

Meridian Energy dropped 5.9% to $5.25 and Contact fell 4.1% to $6.79. Both are included in S&P’s Global Clean Energy Index which was responsible for inflating their share prices in January.

The index builder has now moved to prevent similar liquidity shocks in the future by adding 70 new companies to the index and significantly reducing the weighting of the two Kiwi stocks.

Today, when the market reopened after the Easter weekend investors reacted to the Good Friday announcement and began selling and shorting the two stocks ahead of the rebalance.

Hamesh Sharma, a portfolio manager at Pathfinder Asset Management, said short-selling was putting pressure on the share price as active investors began to predict it would fall.

“Obviously, the index has created massive mispricing,” he said. “No one predicted how much of an impact Joe Biden’s election would have, and it had a disproportionate impact on our market due to liquidity problems.”

Although not included in the index, Mercury NZ also fell 3.9% to $6.25, and Genesis Energy – which still uses some coal and natural gas – declined just 0.7% to $3.47.

Travel stocks, meanwhile, had a boost as the New Zealand government announced the long-awaited trans-Tasman travel bubble would open in two weeks.

Tourism Holdings and Air New Zealand both soared 5.8% to $2.72 and $1.825, respectively.

Kiwi Property Group climbed 0.4% to $1.235. The developer and Tainui Group have formed a second joint venture to develop a central Hamilton shopping centre into a mixed-use retail, office, and potentially residential, precinct.

Sky Network Television said it has signed a multi-year deal extending its arrangements with NBCUniversal to include content such as movies, drama, comedy, reality and news. Its share price rose 1.1% to 18 cents.

The kiwi dollar was trading at 70.54 US cents at 5pm in Wellington, having received a strong bounce from 69.64 cents prior to Easter.

The trade-weighted index was at 74.10 at 5pm, from 73.50 before Easter. The kiwi traded at 92.27 Australian cents from 92.03 cents, 77.74 yen from 77.10 yen, 59.74 euro cents from 59.41 cents, 50.70 British pence from 50.54 pence, and 4.6199 Chinese yuan from 4.5719 yuan.

Tags: Market Close

« Thrills and spills for small cap stocksNZ shares climb as global economy tipped for recover »

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.95 3.29
ANZ 4.44 3.10 3.50 3.84
ANZ Blueprint to Build 1.68 - - -
ANZ Special - 2.50 2.90 3.24
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.55 2.95 3.29
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.55 2.95 3.25
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 3.15 3.22 3.85
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 ▲2.29 ▲2.69 ▲2.99
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.34 3.34 4.14
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.49 2.49 3.29
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
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Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 2.69 2.99 3.29
SBS Bank Special - 2.19 2.49 2.79
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The Co-operative Bank - First Home Special - 2.29 - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.89 3.19
The Co-operative Bank - Standard 4.40 2.99 3.39 3.69
TSB Bank 5.34 3.30 3.69 4.04
TSB Special 4.54 2.50 2.89 3.24
Wairarapa Building Society 4.99 3.55 3.49 -
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Westpac 4.59 3.15 3.49 3.89
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.89 3.29
Median 4.54 2.68 2.99 3.29

Last updated: 29 July 2021 9:04am

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