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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Health: New Zealand's First ‘No Sugary Drinks’ Logo Unveiled

New Zealand’s first “no sugary drinks logo” has been unveiled at an event in Wellington... It will empower communities around New Zealand to lift their health and wellbeing and send a clear message about the damage caused by too much sugar in our diets. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news