MARKET CLOSE: NZ shares extend rally; Xero, Metlifecare, Pacific Edge gain
New Zealand shares extended their rally for a third day as Xero [NZX:XRO] closed in on $30 a share, Metlifecare rose to a five-year high and Pacific Edged soared for a second day.
The NZX 50 Index rose 44.606 points, or 0.9 percent, to 4876.395, a record close. Within the index, 34 stocks rose, 11 fell and five were unchanged. Turnover was $134 million.
Xero, which is flush with funds to take on US market rivals with its cloud based accounting software, climbed 4.4 percent to $29.55 and has soared 272 percent this year. Xero's $3.8 billion market cap is now closing in on that of NZ's largest technology company, Telecom ($4.3 billion).
Pacific Edge jumped 29 percent to $1.37 after the Dunedin-based bladder cancer test inventor signed its second deal with a US healthcare network in as many weeks and today announced a rights issue of $20.5 million to fund its push into the US.
"From New Zealand's perspective, this is what we want - innovative companies doing good things, taking it overseas and hopefully getting some earnings from it," said James Lindsay, portfolio manager at Tyndall Investment Management. "This is smart technology and IP coming out of New Zealand."
Metlifecare rose 7.9 percent to $3.84 and has gained 19 percent this year. Australia's Retirement Villages Group, the biggest shareholder, said this week it hired Goldman Sachs to sell its 37.7 percent stake in the company, confirming a long-expected exit. Infratil, Todd Corp and Ngai Tahu are reportedly interested in the shares which would mean less put into the market and potentially precipitate a takeover.
"People have been expecting that placement to occur for some time," Lindsay said. The stock's gains "reflect that it is probably undervalued anyway."
Among rival rest-home operators, Summerset Group, whose shareholder Quadrant Private Equity exited its holding this month, climbed 1.6 percent to $3.21 and Ryman Healthcare edged up 0.3 percent to $7.43.
As trading closed on the NZX 50, institutional investors were awaiting the outcome of their part of the Meridian Energy share sale. An announcement was due before 7pm.
Among other stocks, OceanaGold rose 4.9 percent to $1.72 and Telecom gained 3.5 percent to $2.355. Fletcher Building gained 0.2 percent to $9.66.
Chorus rose 0.8 percent to $2.49 as the network operator said broadband connections rose 2 percent in the latest quarter as fixed-line connections slipped 0.3 percent.
Kiwi Income Property Trust rose 2.8 percent to $1.115 after announcing the sale of its office building at 205 Queen Street, Auckland, in a two-stage deal to a company associated with privately held Brisbane-based Bloomberg Inc.
MightyRiverPower was unchanged at $2.20 after it said the lowest inflows to the Waikato River since the company's establishment in 1999 didn't stop the company achieving higher weighted average prices for its wholesale electricity generation than its competitors in the three months to Sept. 30.
Contact Energy was unchanged at $5.20 after Deutsche Bank noted it will only get six instead of an expected nine months' benefit from electricity generated at its new Te Mihi geothermal power station, but the delay is offset by gains for the generator-retailer from restoration of the Cook Strait cable to normal capacity.