MARKET CLOSE: NZ shares rise; Spark, Meridian gain
MARKET CLOSE: NZ shares rise; Spark, Meridian gain; Xero drops as FY loss widens
By Suze Metherell
April
24 (BusinessDesk) - New Zealand shares rose, paced by Spark
New Zealand and Meridian Energy, as investors sought
dividend paying stocks. Xero dropped after it reported its
full year loss nearly doubled.
The NZX 50 Index rose
7.447 points, or 0.1 percent, to 5765.356. Within the index,
22 stocks rose, 20 fell and nine were unchanged. Turnover
was $133 million.
Yesterday, the Reserve Bank of New
Zealand's assistant governor John McDermott said it isn't
considering an increase in interest rates at present and is
watching for any signs of weakening demand and domestic
inflationary pressures that could warrant a rate cut.
Investors looking for yield sought income paying
equities.
Spark, formerly known as Telecom Corp, climbed 2 percent to $2.855, rebounding from its lowest level since August last year. Meridian Energy, the partially privatised company, rose 1.1 percent to $1.90. The stock has come under pressure as investors get ready to pay a 50 cent installment receipt next month.
"We had the Reserve Bank speech
yesterday which was very dovish and people are now starting
to factor in a slightly higher probability of a potential
rate cut," said Mark Lister, head of private wealth research
at Craigs Investment Partners. "Spark has been drifting
lower over the last month or so... and was starting to get
to levels that look attractive. Meridian has had a rebound
today, that's another high yield stock so maybe what's
supporting Spark is also supporting Meridian."
Xero
dropped 9.4 percent to $20.85 to the worst performer on the
benchmark index. The cloud-based accounting software firm
said its annual loss widened to $69.5 million from $35.5
million a year earlier, as its increased spend on product
development, sales and marketing for future growth, offset a
rise in sales. It also announced its US-based chief
financial officer Douglas Jeffries has left after only two
months in the role and its previous CFO Ross Jenkins will
assume the role until it finds a replacement. In September,
Xero’s North American chief executive Peter Karpas left
the business just six months after joining.
"Topline
revenue was probably where people expected it to be but
profit margins were down because costs went up more quickly
than people expected," said Mark Lister, head of private
wealth research at Craigs Investment Partners. "When you
loose a CFO and they've only been there for a pretty short
space of time the market was never going to take an
announcement like that well."
Air New Zealand dropped
2.1 percent to $2.75. The national carrier had benefited
from a drop in global oil prices, with jet fuel being a
major input cost for the airline, however oil prices have
begun to rise, meaning cheaper fuel might be over, Lister
said.
Pacific Edge, the biotech firm, led the
benchmark index higher up 2.7 percent to 75 cents. Trade Me
Group, the online auction site, paced the gain advancing 2.4
percent to $3.81. Ebos Group, the animal and healthcare
manufacturer, rose 2.1 percent to $9.85.
Outside the
benchmark index, Abano Healthcare fell 1.3 percent to $7.65.
The medical investment firm said it expects to report a
small full-year loss after it agreed to sell its stake in
Aotea Pathology and following the sale of its orthotics unit
in January, which resulted in impairments on both
businesses. The net loss is expected to be $1.3 million to
$1.9 million in the year ending May
31.
(BusinessDesk)