MARKET CLOSE NZ shares fall as Diligent extends slump, Xero soars
New Zealand shares fell as Diligent Board Member Services was punished for a second day over its pace of sales growth and SkyCity Entertainment Group slipped on bigger than usual volumes. Xero soared to a record close after raising more funds from US investors.
The NZX 50 Index fell 6.603 points, or 0.1 percent, to 4734.167. Within the index, 24 stocks fell, 16 rose and 10 were unchanged. Turnover was $104 million.
Diligent dropped 15 percent to $4.12, adding to its 14 percent decline on Friday, when the boardroom software company said it signed 122 net new client agreements in the three months ended Sept. 30, down from 168 a year earlier. The company has previously flagged that it is restating three years of revenue because of miscounting.
"It looks like they have a great product but compliance and corporate governance has clearly been an issue," said David Price, a broker at Forsyth Barr. "You might forgive a miss on a sales target but at the moment everything is conspiring against them. The market has got a little tired of unfavourable news."
SkyCity, the Auckland-based casino and hotel operator, slipped about 1 percent to $4.03 and was the most traded stock on the NZX 50, with about 3.5 million shares changing hands.
"There's probably a number of leading stocks pushing the boundaries in a valuation sense," Price said. SkyCity "is one that's not and from our point of view is still attractive."
The shares are rated a 'buy' based on the consensus of analysts polled by Reuters and are trading at a forward price-earnings ratio of about 16.4 times, which is lower than most of its Australian rivals, according to Reuters data.
Sky Network Television, the nation's biggest pay-TV operator, fell 1.5 percent to $6.01. Retailer Warehouse Group dropped 1.9 percent to $3.70 and Kathmandu Holdings declined 1.4 percent to $3.58.
Fletcher Building slipped 0.4 percent to $9.42 and Telecom fell 0.2 percent to $2.295.
Xero, the cloud-based accounting company, rose 9.8 percent to a record close of $19.70 after announcing it had raised $180 million in new equity capital, mainly from US-based investors including existing shareholders Matrix Capital Management and Peter Thiel-backed Valar Ventures. Xero's cash reserves jumped to $230 million, giving it ample head room to pursue its global growth strategy.
"That's obviously a vote of confidence in the company," Price said.