MARKET CLOSE: NZ shares gain; Xero, Ryman at record
MARKET CLOSE: NZ shares gain; Xero, Ryman, Summerset at record, Chorus drops
Nov. 5 (BusinessDesk) – New Zealand shares rose as Xero, Ryman Healthcare and Summerset Group all rose to record highs. Chorus was the biggest decliner after the regulator reiterated the need for price cuts for network access.
The NZX 50 Index gained 28.026 points, or 0.6 percent, to 4938.702. Within the index, 21 stocks rose, 18 fell and 11 were unchanged. Turnover was $118 million.
Xero, the cloud-based accounting company that raised $180 million from mainly US investors last month, jumped 10 percent to $33.15. Its market value of $4.23 billion ranks the company fourth largest in the benchmark index. Last month’s capital raising, supported by Matrix Capital Management, Peter Thiel-backed Valar Ventures, was at $18.15 a share.
“It’s an amazing performance and I just wonder if the market is not starting to get ahead of itself,” said Grant Williamson, a director at Hamilton Hindin Greene. There’s a risk of disappointment when Xero next posts growth figures and Williamson said he was “starting to get a little concerned about the hype surrounding this.”
Among other companies with high-growth potential, Diligent Board member Services rose 1.2 percent to $4.35 and A2 Corp climbed 1.4 percent to 72 cents.
Fletcher Building, the biggest company on the NZX 50, rose 1.4 percent to $9.73 while clothing chain Hallenstein Glasson Holdings rose 1 percent to $4.97, leading gains among some retailers. Warehouse Group rose 0.8 percent to $3.73.
Ryman, the biggest retirement village operator on the bourse, gained 2.2 percent to $7.77, a record close, bringing its gain this year to 67 percent. Smaller rival Summerset Group gained 2.8 percent to $3.34, also a record, after announcing it had gained approval for its $120 million Hobsonville village. Metlifecare rose 0.3 percent to $4.08.
“Any sort of news like that does create further interest,” Williamson said.
Chorus, the network operator, fell 6.8 percent to $2.45 after Telecommunications Commissioner Stephen Gale proposed a slightly less severe cut to the price the company can charge for access to its copper network of $34.44 per line – still 23 percent below the current price.
While the government is expected to push back on the regulator’s position to give Chorus some relief, Communications Minister Amy Adams only said today the government was considering its options.
“There are quite high expectations there will be further work done on Chorus and it may be something a bit more favourable to them,” Williamson said.
Telecom, which is among phone companies that would benefit from lower prices, fell 0.9 percent to $2.33.
Tech start-up GeoOp climbed 7.3 percent to $2.95, having sold shares in a private sale this year for just $1. Meridian Energy rose 0.5 percent to $1.105.