Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


UPDATE: Xero responds to price inquiry as growth stocks fall

UPDATE: Xero responds to price inquiry as investors shun growth stocks

(Updated to include Xero price inquiry and response)

By Suze Metherell

June 24 (BusinessDesk) - Xero has responded to a stock market operator price inquiry after the cloud-based accounting software firm and Pacific Edge both fell to eight-month lows in morning trade as investors freed up cash for upcoming listings by selling growth stocks.

The stock market regulator issued a 'please explain' notice to Xero over a 22 percent, or $6.31, decline in its share price since June 16 to an eight-month low $23 at 11 am today. The stock has "historically been subject to significant volatility as a result of its tightly held share price," and Xero complies with continuous disclosure rules, the Wellington-based firm's chief financial officer Ross Jenkins said in a letter to the regulator.

"Since the $180 million capital raise at $18.15 in October 2014, Xero's share price has been on a rapid upward trend, in part driven by increased global investor exposure and the inclusion in various large global indices," Jenkins said. "In March/April this year, the market saw a substantial general re-rating of software-as-a-service stocks, which impacted Xero's share price."

Xero pared its morning losses and was recently down 4.3 percent to $24.80. The Wellington-based cloud accounting software firm has fallen 46 percent in the past three months, from an intraday record of $45.99 in early March, and was one of a group of growth-orientated stocks under pressure today. Dunedin-based biotech company Pacific Edge declined 6.2 percent to an eight-month low of 76 cents and has plunged 49 percent in the past three months. Outside the benchmark index, security software firm Wynyard Group dropped 1.8 percent to $2.14.

"All the growth stocks continue to be chasing the same pool of investors with all the new listings coming on the market as well," said Bryon Burke, head of equities at Craigs Investment Partners. "The issue with the growth stocks is, what are they worth when they're coming down when there is no yield and no PE (price to earnings ratio)?

"There are a lot of growth stocks around and they seem to be losing favour at this stage and there are more coming onto the market and that seems to be where the money is heading, to the new ones," Burke said.

Serko debuted on the NZX today at $1.10 before sliding 9 percent to recently trade at $1. The online business travel booking company, raised some $17 million selling 15.5 million of new shares at $1.10 apiece, while a further 4.5 million existing shares worth $5 million were sold into the offer. The Auckland-based company closed its public pool early and said those investors may receive fewer than the number of shares requested because of strong demand.

Gentrack, which develops utilities and airports software, lists tomorrow in a $99.1 million initial public offer, selling shares at $2.40 apiece.

Other companies set to list on the NZX include, Scales Corp on July 26, while IkeGPS released its prospectus yesterday.

Meanwhile Hirepool, which was due to list on the NZX stock exchange next month has, pulled its listing after 64 percent owner, Australian private equity firm Next Capital, has abandoned plans to sell shares in a $262 million initial public offering after concern from institutional investors that on market support for shares of the unprofitable equipment rental company wouldn't be strong enough.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Inequality: Top 10% Of Housholds Have Half Of Total Net Worth

The average New Zealand household was worth $289,000 in the year to June 2015, Statistics New Zealand said today. However wealth was not evenly distributed, with the top 10 percent accounting for around half of total wealth. In contrast, the bottom 40 percent held 3 percent of total wealth. More>>

ALSO:

What Winter? Temperature Records Set For June 20-22

The days around the winter soltice produced a number of notably warm tempertaures. More>>

Conservation Deal: New Kākāpō Recovery Partnership Welcomed

Conservation Minister Maggie Barry says the new kakapo recovery partnership between DOC and Meridian Energy is great news for efforts to save one of New Zealand’s most beloved birds. More>>

ALSO:

Tech Sector Report: Joyce Warns Asian Tech Investors View NZ As Hobbits And Food

Speaking in Wellington at the launch of a report showcasing the value of the technology sector to the New Zealand economy, Joyce said more had to be done to tell the country's technology stories overseas. More>>

ALSO:

Mediaglommeration: APN Gets OIO Approval For Demerger Plan

APN News & Media has received Overseas Investment Office approval for its plan to split out its NZME unit ahead of a potential merger with rival Fairfax Media's New Zealand operations. More>>

New Paper: Ninety-Day Trial Period Has No Impact On Firms' Hiring

The introduction of a 90-day trial period has had no impact on hiring by New Zealand companies although they are now in widespread use, according to researchers at Motu Economic and Public Policy Research. More>>

ALSO:

Corrections: Serco Exits Equity Stake, Remains As Operator

Serco has sold its equity stake in the company that holds the contract to design, build and run Wiri Prison in South Auckland but continues as sub-contractor to operate the facility. More>>

GDP: NZ Economy Grows Faster-Than-Forecast 0.7%

New Zealand's economy grew at a faster pace than expected in the first quarter of 2016 as construction expanded at the quickest rate in two years. The kiwi dollar jumped after the data was released. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news