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NZ sharemarket ends up 0.6% after jobs data

New Zealand share prices ended firm on the back of takeover activity and better-than-expected unemployment data.NZ sharemarket ends up 0.6% after jobs data

Wednesday, May 7th 2025, 6:34PM

by BusinessDesk

The S&P/NZX50 index ended 75.8 points or 0.6% higher at 12,496.89.

There were 79 rises and 58 falls among the 44.2 million shares worth $144.1m traded.

Takeover target Manawa gained $1.34 or 27.6% to close at $6.19 after the Commerce Commission approved its merger with Contact Energy, which fell 15c to $8.99.

'Not too bad'

Unemployment remained unchanged at 5.1% in the March quarter, a touch lower than market expectations.

However, BNZ economists said the undershoot was partly due to the participation rate dipping to 70.8% from 70.9%.

“It basically just reaffirms that the employment market is soft and is probably getting softer,” said Greg Smith, head of retail at Devon Funds.

“Even though the headline unemployment rate was, on the face of it, not too bad, it reinforces continued relatively low business confidence, business investment intentions and employment intentions.

“We need support, and it has to be in the form of a decent rate cut at the end of this month [May 28] from the Reserve Bank.”

He said approval of the Contact-Manawa merger had “put a blowtorch” under Manawa’s share price.

“There had been some doubt about whether it was going to proceed after the Commerce Commission expressed some concerns,” Smith said.

'More resilience'

The deal will make Contact the clear number two power generator, ahead of Mercury and behind Meridian.

It also gives Contact, which has large geothermal stations in the Central North Island, more versatility in its hydro generating capability.

“It gives them optionality with respect to generation and more resilience to hydrological conditions across the broader market,” Smith said.

Infratil, which owns 51% of Manawa Energy, will end up with about 9.5% of Contact and cash proceeds of $186m as part of the deal.

The infrastructure investor closed 9.5c higher at $11.67.

Smith said Infratil had been firm on the back of top management buying shares in the company after it increased its holding in CDC Data Centres in February.

Market data showed $3.8m worth of shares had been bought by company insiders, including chief executive Jason Boyes, at $9.57 in April.

The data showed that executives bought $13m worth of shares in February.

The stock had traded as low as $9.35 in early April.

Tags: Market Close

« SkyCity folds 6% as NZX 50 trades flatNZ sharemarket rises with gentailers leading after Contact-Manawa deal »

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AIA - Back My Build 4.44 - - -
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