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

 


MARKET CLOSE: NZ shares gain, led by Xero

MARKET CLOSE: NZ shares gain, led by Xero

By Tina Morrison

July 25 (BusinessDesk) - New Zealand shares rose, led by Xero after investors gained confidence about the cloud-based accounting software firm's US expansion plans following upbeat comments at the company's annual meeting this week.

The NZX 50 Index rose 19.556 points, or 0.4 percent, to 5,194.268. Within the index 21 stocks rose, 18 fell and 11 were unchanged. Turnover was $121 million.

Xero advanced 5.7 percent to $25.90. The stock has gained 9.8 percent since its annual general meeting in Wellington on Wednesday when chief executive Rod Drury was upbeat about the company's prospects in the US, where it faces a battle with the incumbent accounting software provider Intuit. Drury belaboured not only a belief that Xero's cloud-based product suite is outgunning Intuit's attempts to move into the cloud, but also that the company will benefit from establishing strong positions in the Australian and UK markets before embarking on the US.

"Post their AGM, Xero has continued to improve," said Grant Williamson, a director at brokerage Hamilton Hindin Greene. "The AGM presentation just gave investors a little bit more confidence that the company is on the right track, particularly in America, so that's created a bit of buying in the stock."

Telecom Corp, New Zealand's largest telecommunications provider, rose 0.7 percent to $2.954, its highest level since May 2008. The stock has gained 9.6 percent so far this month as investors favour yield stocks over growth stocks in anticipation the Reserve Bank will keep interest rates on hold for a period after hiking the benchmark yesterday for its fourth consecutive meeting this year.

"Telecom continues to grind its way higher," said Williamson. "That's been one of the better performing stocks in recent times. Investors now realise that interest rates are not going to go up too much more in the short term and therefore they are starting to come back and look at yield stocks on the market."

Demand for yield is pushing up property stocks and weakening growth stocks such as retirement village operators, Williamson said.

Kiwi Income Property Trust gained 1.3 percent to $1.195, Precinct Properties New Zealand rose 1.4 percent to $1.11, Property For Industry increased 1.1 percent to $1.36 and Goodman Property Trust advanced 0.5 percent to $1.075.

"Investors are turned off a little bit by the higher risk growth stocks and are now really looking more towards the defensive income stocks," said Williamson. "Retirement village stocks are under a bit of pressure as well mainly because they don't pay much in the way of income, they are considered growth stocks. We are seeing investors making a bit of a switch from growth to income."

"It is really an interest rate story with the Reserve Bank saying we will pause and review things a bit later on," he said. "Investors have come to the conclusion that in the short term, interest rates don't go any higher."

Ryman Healthcare slipped 1 percent to $8.06, while Metlifecare fell 2.1 percent to $4.19 and Summerset Group Holdings was unchanged at $3.12.

Meanwhile, debut stock Scales Corp closed weaker at $1.58, having first traded at $1.61, largely flat compared to the fruit and logistics company's $1.60 IPO price. Some 2.7 million shares of the company’s 139.8 million shares on issue changed hands.

"It was a pretty muted first day trading," said Williamson, adding the company is probably affected by some IPO fatigue in the market and current sentiment favouring defensive stocks rather than riskier companies such as Scales whose apple growing operations could be affected by weather and growing conditions.

Port of Tauranga rose 0.3 percent to close at a record high $15.85 as investors acquired more of the utility stock after it said earlier this month it had won a slot in Maersk's Southern Star service from Ports of Auckland, cementing its place as New Zealand's biggest container port.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

On For Christmas: KiwiRail Ferries Back In Full Operation After Quake

KiwiRail’s Interislander ferries are back in full operation for the first time since the Kaikoura earthquake, with the railspan that allows rail wagons to be loaded on the Aratere now restored. More>>

ALSO:

Comerce Commission Investigation: Prosecutions Over Steel Mesh Labelling

Steel & Tube Holdings, along with two other companies, will be prosecuted by the Commerce Commission following the regulator's investigation into seismic steel mesh, while Fletcher Building's steel division has been given a warning. More>>

ALSO:

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Women's Affairs: Government Accepts Recommendations On Pay Equity

The Government will update the Equal Pay Act and amend the Employment Relations Act to implement recommendations of the Joint Working Group on Pay Equity. More>>

ALSO:

Immigration: Increase In Seasonal Workers For RSE

The current cap will be increased by 1,000 from 9,500 to 10,500 RSE workers for the 2016-17 season. Mr Woodhouse says the horticulture and viticulture industry is New Zealand’s fourth largest export industry, producing almost $5 billion in exports. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news