MARKET CLOSE: NZ shares snap 3-day slide; Xero, Chorus gain
Dec. 6 (BusinessDesk) – New Zealand shares rose, snapping a three-day slide as equity markets across the Asia-Pacific region generally gained. Xero resumed its climb after two US funds gave the company equity capital and Chorus clawed back from its regulator-induced plunge.
The NZX 50 Index rose 16.11 points, or 0.4 percent, to 4023.36. Within the index, 23 stocks rose, 14 fell and 13 were unchanged. Turnover was $131 million.
Xero, the cloud-based accounting service, rose 5.6 percent to $7.60, edging back to the record high $7.75 reached on Monday, having raised $60 million selling shares to Peter Thiel-backed Valar Ventures and Matrix Capital. That’s enough funds for three years at the current burn rate.
“Clearly there’s been quite a substantial change in the makeup of the register,” said Shane Solly, portfolio manager at Mint Asset Management. Xero now has “a bit of capital to support the growth.”
Chorus, the network company spun off from Telecom last year, rose 2.2 percent to $2.85, its second daily gain after a two-day, 18.5 percent slump after the Commerce Commission released a draft determination the company said could slash annual pretax earnings as much as $160 million.
“We’re still in the depths of uncertainty with Chorus,” Solly said. “People particularly concerned have done their selling. For a lot of New Zealand businesses, where the regulator’s been involved New Zealand doesn’t have a great track record.”
OceanaGold, whose interest range from the Macraes gold field in central Otago to its Didipio project in the Philippines, fell 1.9 percent to $3.53, extending yesterday’s 12.2 percent slump after the company unexpected raised C$93.3 million selling 30 million shares for C$3.11 apiece in Canada.
“There’s a bit of surprise the company raised capital when people didn’t think they needed to,” Solly said.
Fletcher Building, the biggest company on the NZX 50, rose 1.5 percent to $7.97. The Reserve Bank kept its official cash rate at a record low 2.5 percent, helping anchor mortgage rates and allowing the housing market top continue its revival.
Telecom rose 0.2 percent to $2.275.
Postie Plus Group rose 5 percent to 21 cents after announcing it has again avoided a breach of its banking covenants and gained a 12-month extension on its facilities. Bank of New Zealand completed its annual review of the banking facilities,” the Christchurch-based company said in a statement.
Pumpkin Patch, the children’s clothing retailer, rose 4 percent to $1.30 and carpet maker Cavalier rose 3 percent to $1.71.
NZX, the stock market operator, rose 1.7 percent to $1.23 after holding an investor open day. NZ Oil & Gas climbed 1.7 percent to 88 cents.