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


MARKET CLOSE: NZ shares rise, led by Xero; Fonterra gains

MARKET CLOSE: NZ shares rise, led by Xero; Fonterra gains

By Suze Metherell

Sept. 28 (BusinessDesk) - New Zealand shares rose, led by Xero, after it lifted fees for in its second largest market. Fonterra Shareholders' Fund extended recent gains as farmers bought in to access an interest free loan.

The S&P/NZX 50 Index advanced 11.78 points, or 0.2 percent, to 5699.13. Within the index, 27 stocks rose, 15 fell and eight were unchanged. Turnover was $106 million.

Xero led the benchmark index higher, up 3.8 percent to $15.10. The cloud-based software firm has increased fees in its second biggest market, New Zealand upping its starter pack by $2.50 a month to $27.50 and increasing its standard package $5 to $55. The company is forgoing profit to fund its US push where it hopes to capture the small-to-medium sized business market.

"Another strong day for Xero ... which follows on from a couple of positive days late last week," said Matthew Goodson, managing director at Salt Funds Management. "The main thing that happened there was that put a series of price increases through New Zealand. Perhaps surprising, given Rod Drury had said that would never happen while he was in charge of the company. So the market seems to be taking it positively rather than negatively but the key remains getting overseas growth."

Units in Fonterra Shareholders' Fund, which give holders access to Fonterra Cooperative Group's dividend stream, gained 0.4 percent to $5.62 and are up 16 percent over the past month. The world's largest dairy exporter is offering its farmers an interest free loan, which is expected to cost the cooperative up to $430 million, after cutting its payout to the lowest level in a decade. So far more than 7,000 loan applications have been received, amounting to 70 percent of farmer shareholders, for the offer of a loan equivalent to an additional 50 cents per share-backed kilogram of milk solids for production through to December.

"They've had a decent period since their result," Goodson said. "One of the factors behind it is I believe for farmers to get the interest free loan. There was a date by which they had to purchase shares."

Meridian Energy gave up rights to its 8.08 cents final dividend and its 3.95 Cps special dividend, which saw the shares drop 5.3 percent, or 12 cents, to $2.135.

Spark New Zealand, the telco, declined 0.6 percent to $3.09. Construction and building supplies firm Fletcher Building fell 0.6 percent to $6.87. Ryman Healthcare, which operates retirement villages, slipped 0.3 percent to $7.33.

Outside the benchmark index, Comvita rose 4.8 percent to $6.50. The manuka honey health products maker will take a 19.9 percent stake in SeaDragon, helping provide funding for the fish oil refiner to complete a new manufacturing facility in Nelson, and giving Comvita a secure supply of fish oil as it looks to expand its health supplement range. SeaDragon put on 30 percent to 1.3 cents.

ERoad dropped 10 percent to $2.98. The electronic road user charges and transport services company said it’s unlikely to meet its financial forecasts in 2016, the second straight year it would miss targets after accelerating its US expansion hurt short-term sales and added costs.

Pumpkin Patch declined 16 percent to 8.4 cents. On Friday, the children's clothing retailer delayed the release of its 2015 results and said provisioning means it will miss earnings guidance and post a bigger net loss, which has forced it into talks with its lender, ANZ Bank New Zealand. The first $25 million tranche of its debt facility comes due at the end of this month and the remaining $50 million expires on Feb. 29 next year.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Commerce Commission: Latest Broadband Report Confirms Improved Performance Of Premium Fibre Plans

The latest report from the Commerce Commission’s Measuring Broadband New Zealand programme shows that the performance of Fibre Max plans has improved substantially. This follows a collaboration between the Commission, its independent testing partner, ... More>>

Air New Zealand: Capital Raise Deferred

Air New Zealand has decided to defer its planned capital raise to later in 2021 allowing more time to assess the impacts of recent developments on the airline’s path to recovery. 'We’ve seen some clearing of COVID-19 clouds recently, with ... More>>

Commerce Commission: Cartel Conduct Now Punishable By Up To 7 Years’ Jail Time

Cartel conduct can now be punished with a term of imprisonment of up to 7 years, after the Commerce (Criminalisation of Cartels) Amendment Act 2019 came into effect today. Cartel conduct includes price fixing, market allocation and bid rigging (see ... More>>

Stats NZ: Auckland Population May Hit 2 Million In Early 2030s

Auckland’s population may rise from about 1.7 million currently to 2 million by early next decade, Stats NZ said today. “Auckland will likely have the highest average annual growth of New Zealand’s 16 regions over the next 30 years, from ... More>>

Stats NZ: March Card Spending Rebounds Despite COVID

There was a lift in retail card spending in March following a fall in the lockdown-disrupted February month, Stats NZ said today. Seasonally adjusted retail card spending rose by $53 million (0.9 percent), compared with February 2021. Visit our website to read ... More>>

PwC: Outcome Of Review Into Air New Zealand Gas Turbines Business

Air New Zealand has received the report into its Gas Turbines business from independent external advisers PwC. Air New Zealand Chairman Dame Therese Walsh says the report identified a range of effective controls in the Gas Turbines revenue contracting ... More>>

LPG Association: Renewable LPG Achieves Emissions Budgets With No Need To Ban New LPG Connections

Renewable LPG can supply New Zealand’s LPG needs and achieve the emissions reductions proposed by the Climate Commission without the need to ban new connections, a new study shows. The investigation, by leading consultancy Worley, was prepared for the ... More>>