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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Oceans: NOAA Declares Third Ever Global Coral Bleaching Event

As record ocean temperatures cause widespread coral bleaching across Hawaii, NOAA scientists confirm the same stressful conditions are expanding to the Caribbean and may last into the new year, prompting the declaration of the third global coral bleaching event ever on record. More>>

Scoop Business: A Decade Of Government Pre-Seed Investment

More publicly-funded science is being commercialised after a decade of government ‘pre-see’d investment, according to an independent review. More>>


Solid Energy: Plan To Shut Unprofitable Huntly East Mine

Solid Energy, the state-owned coal miner in voluntary administration, plans to shut down its unprofitable Huntly East mine and lay off 65 staff after deciding the site stands "no chance whatsoever" of finding a buyer. More>>


E Tū: Merger Creates NZ's Biggest Private Sector Union

E tū has been created by the merger of the Engineering, Printing and Manufacturing Union and Service and Food Workers’ Union. It represents more than 50,000 working New Zealanders in industries as diverse as aviation, construction, journalism, food manufacturing, mining and cleaning. More>>


Internet: NZ Govt Lifts Target Speeds For Rural Broadband

The government has lifted its expectations on faster broadband speeds for rural New Zealand as it targets increased spending on research and development in the country's information and communications technology sector, which it sees as a key driver for export growth. More>>


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news