MARKET CLOSE: NZ shares gain with global rally on debt deal; Xero above $25

Oct. 17 (BusinessDesk) – New Zealand shares rose, as part of a global rally in equity markets after US politicians agreed a deal which would pass the US budget and lift the nation’s borrowing limit. Xero soared above $25 and Air New Zealand gained to a five-month high.

The NZX 50 Index rose 17.231 points, or 0.4 percent, to 4776.002. Within the index, 18 stocks rose, 19 fell and 12 were unchanged.

Share markets gained across Asia today following a rally of more than 1 percent on the Standard & Poor’s 500 Index and the Dow Jones Industrial Average. US politicians ended a stalemate that resulted in a partial government shutdown and threatened to force the US into an historic debt default. The deal extends the US borrowing authority until Feb. 7.

Xero jumped 12 percent to $25.20, pushing the cloud-based accounting company’s market value up to $2.95 billion and its advance this year to 191 percent. It was the most heavily traded share on the NZX 50, with $19.7 million of turnover.

“In Xero you’ve got a very high quality management team and an incredibly good product that’s well received in the market – and it’s cloud-based not desktop,” said Mark Warminger, portfolio manager at Milford Asset Management. “It’s six years ahead of any challenger and some of the biggest tech funds in the world are sitting on the share register ready to support them.”

The market had experienced “a sigh of relief rally” after Washington’s political deadlock was removed and investors say there’s time for more discussions before the new February deadline, he said. Meantime, the Federal Reserve’s quantitative easing should remain to stimulate the world’s biggest economy.

Diligent Board Member Services rose 2.9 percent to $4.30 after the company said it will take longer to restate its books than previously thought, though it doubts the stock exchange will suspend trading in its shares. The shares have plunged 46 percent from a peak in June.

Hallenstein Glasson Holdings rose 1.8 percent to $5, leading gains among some retailers. Kathmandu Holdings rose 1.4 percent to $$3.65. Michael Hill International gained 1.3 percent to $1.52.

Air New Zealand rose 1.3 percent to $1.52.

Chorus, the network operator, fell 1.9 percent to $2.54. The government’s proposed intervention limiting the cut in wholesale prices on Chorus’s copper network will grant the telecommunications company “windfall gains”, gas and electricity lines company Vector, in a submission on law governing the telecommunications sector.

Fletcher Building fell 0.4 percent to $9.49 and Telecom was unchanged at $2.28.

Cavalier, the only listed carpet maker, was unchanged at $1.82 after managing director Colin McKenzie said a spike in the price of coarse wool may be alleviated by the main shear season from December to early February.

Restaurant Brands New Zealand rose 0.7 percent to $2.88 after the fast food operator posted flat first half earnings and said an improvement in the second half would see full-year earnings rise as much as 7.3 percent.

Abano Healthcare rose 0.3 percent to $6.78 after saying shareholder Peter Hutson had failed to respond to its offer to buy his half stake in their audiology venture and his alternative proposal to take over the specialist medical investors is “rife with insider elements.”

(BusinessDesk)

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