Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


MARKET CLOSE: NZ shares mixed; Chorus falls, Xero soars

MARKET CLOSE: NZ shares mixed; Chorus falls on regulatory threat, Xero soars

Dec. 3 (BusinessDesk) - New Zealand shares fell after telecommunications network operator Chorus said a draft view of price curbs proposed by the regulator could wipe $160 million from earnings. Xero soared to a record after raising funds from US investors.

The NZX 50 Index fell 0.99 points, or 0.02 percent, to 4049.09. Within the index, 20 stocks rose, 15 fell and 15 were unchanged. Turnover of $143 million was dominated by Telecom, Chorus and Fletcher Building.

Chorus, which was spun off from Telecom last year, tumbled 14 percent to $2.91 after the Commerce Commission released draft plans to steeply cut what the telecommunications network operator can charge for access to electronic switchgear on its ageing copper lines. Communications Minister Amy Adams is reviewing the recommendation, suggesting it could yet be pared back.

“As it sits it’s certainly pretty bad for Chorus, with implications for dividends and debt,” said David Price, a broker at Forsyth Barr. Still, the minister’s quick response implies “we will get some sort of change.”

Adams asked her officials to review the effects of the pricing and said it’s important to find a methodology appropriate to New Zealand.

Telecom rose 0.4 percent to $2.32. The stock is rated ‘underperform’ based on the consensus of 11 recommendations compiled by Reuters, with a price target of $2.23.

Xero, the cloud-based accounting service, rose about 12 percent to a record close of $7.70, giving the company a market value of $902 million before it has even made a profit. The company raised $82 million selling shares to two US funds, including the Peter Thiel-backed Valar Ventures at $6 apiece.

Price said the capital raising gives Xero enough cash for three years at its current burn rate and the confidence shown by the US investors “is an endorsement of the stock.”

PGG Wrightson rose 2.8 percent to 37 cents after the nation’s largest rural services company said it has finally received repayment of loans over the Crafar Farms of about $25 million following the sale of the properties to China’s Shanghai Pengxin Group.

The Crafar Farms went into receivership in 2009.

Warehouse Group, the biggest retailer on the exchange, gained 2.6 percent to $3.13 and Fisher & Paykel Healthcare gained about 2 percent to $2.61.

Glass Earth Gold tumbled 13 percent to 21 cents. The company is raising as much as C$3 million in a private placement in Canada to develop its Neavesville and WKP projects in the Hauraki region, it said today.

Fletcher Building, the biggest company on the exchange, rose 0.8 percent to $7.98. Contact Energy, the biggest power company on the NZX 50, gained 1.3 percent to $5.39.

Tourism Holdings, the campervan company, gained 1.4 percent to 74 cents.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news