MARKET CLOSE: NZX 50 soars to record; Xero, power companies gain
By Suze Metherell
April 30 (BusinessDesk) – The NZX 50 Index climbed to a record as a new US partner for Xero saw investors return to the sold-off stock, while high-yield power companies MightyRiverPower, Contact Energy, Meridian Energy and Genesis Energy paced gains.
The benchmark index rose 84.385 points, or 1.6 percent, to 5232.676 points. Within the index, 38 stocks rose, five fell and seven were unchanged. Turnover was $279 million. The NZX 50 climbed 1.3 percent this month, and about 10 percent in the year.
Xero, the cloud-based accounting software company chasing growth, secured a partnership with H&R Block in the US and slowed cash burn for the first three months of this year luring back investors. The company was caught in a global tech sell-off, sliding 20 percent over the past month, as investors questioned the valuations of high-growth companies. The shares rose 5.5 percent to $31.65.
“Probably slightly better than we were expecting in terms of cash burn, down $2.5 million from the previous quarter, but I think it’s more to do with the strategic partner H&R Block,” said David Price, a Forsyth Barr broker. “It’s a matter of seeing whether they can convert these alliances into dollars.”
State-controlled energy company Meridian rose 2.5 percent to $1.23, while fellow government-controlled MRP climbed 1.5 percent to $2.325, an eight-and-a-half month high. Contact advanced 1.4 percent to $5.69. Auckland lines company Vector increased 2 percent to $2.56.
Outside the benchmark index Genesis rose for the fourth consecutive day up 0.5 percent to $1.90.
“You’ve seen a lot of electricity generators have a pretty strong rally as of late, and that is a refocus on the yield that they do offer,” said Price. “People are looking at what the comparative out there is for them and they do look relatively attractive.”
Telecom advanced 1.8 percent to $2.77. Auckland International Airport climbed 2.1 percent to $3.97. Air New Zealand rose 1.2 percent to $2.10. Fletcher Building was unchanged at $9.85.
OceanaGold led gainers rising 11 percent to $2.93. The Melbourne-based copper and gold miner reported a 730 percent boost in first quarter earnings as its Philippines’ operation came online.
Diligent Board Member Services rose 5.3 percent to $4.54 after the governance app maker reported its 2013 annual report having restated financials for the last three years due to an accounting error.
New Zealand Oil & Gas rose 1.3 percent to 77.5 cents. The Wellington-based oil and gas exploration firm said it was cautiously optimistic about oil exploration at Pateke, part of the Tui oil field of which it has a 28 percent stake in.
Among the day’s decliners, Guinness Peat Group fell 0.7 percent to 68 cents. Insurer Tower slipped 0.6 percent while units in the Fonterra Shareholders’ Fund declined 0.2 percent to $6.14.
The dual-listed Australian banks slipped, with Westpac Banking Corp down 0.5 percent to $38.20 and Australia and New Zealand Banking Group fell 0.3 percent to $37.39.