MARKET CLOSE: NZ shares rise; tech stocks gain
MARKET CLOSE: NZ shares rise; Diligent jumps on Facebook bandwagon
By Suze Metherell
Jan. 31 (BusinessDesk) – New Zealand stock rose with a global rally, as Diligent Board Member Services rose after positive news out of the US tech sector.
The NZX 50 Index climbed 24.741 points, or 0.5 percent, to 4874.583. Within the Index 26 stock rose, 18 fell and six were unchanged. Total turnover for the day was $102.7 million.
Overnight positive news from social networking website Facebook announcing strong advertising revenue on its smart-phone app underpinned a rally on Wall Street. Asian markets followed suit, with South Korea’s KOPSI 200 Index up 1.2 percent in afternoon trading. Japan’s Nikkei 225 Index rose 0.2 percent, while Hong Kong’s Hang Seng Index slipped 0.5 percent.
“With high growth stocks, like Diligent, they respond to any good news in the tech sector,” said Peter McIntyre, investment advisor at Craigs Investment Partners. “Overnight there was good news out of Facebook, and here tech stock responded to that.”
Diligent, which is in the process of restating its accounts, rose 2.6 percent to $4.35. Fellow tech stock, cloud-based accounting software company Xero also gained 1.8 percent to $41.49. The Wellington-based company said its cash-burn rose at a slower pace in the December quarter.
The market considered Reserve Bank governor Graeme Wheeler’s reiterated promise to hike interest rates, causing dividend paying investments, like property stock, to lose their appeal.
“The market is in a state of flux at the moment. We’ve had low interest rates for a period of three years now,” said McIntyre. “So we are seeing some rejigging over stocks that are interest rate sensitive.”
Precinct Properties New Zealand dropped 1 percent to 98.5 cents, Property for Industry declined 0.4 percent to $1.265. Goodman Property slid 0.5 percent to 96.5 cents, and Argosy Property fell 0.6 percent to 91 cents. DNZ Property Fund was unchanged at $1.52
Blue chip stocks were up, with New Zealand’s biggest company Fletcher Building gaining 2.4 percent to $9.08. Auction website Trade Me Group climbed 1.7 percent to $4.09. Telecom was up 1.3 percent to $2.35, and casino operator Skycity Entertainment group rose 0.5 percent to $3.87.
Fonterra Shareholders Fund gained 0.6 percent to $6.30 after government figures showed growing dairy exports boosted the trade balance to a surplus of $523 million in December.