MARKET CLOSE: NZ shares rise Diligent jumps on Facebook bandwagon

 New Zealand stock rose with a global rally, as Diligent Board Member Services rose after positive news out of the US tech sector.

The NZX 50 Index climbed 24.741 points, or 0.5 percent, to 4874.583. Within the Index 26 stock rose, 18 fell and six were unchanged. Total turnover for the day was $102.7 million.

Overnight positive news from social networking website Facebook announcing strong advertising revenue on its smart-phone app underpinned a rally on Wall Street. Asian markets followed suit, with South Korea's KOPSI 200 Index up 1.2 percent in afternoon trading. Japan's Nikkei 225 Index rose 0.2 percent, while Hong Kong's Hang Seng Index slipped 0.5 percent.

"With high growth stocks, like Diligent, they respond to any good news in the tech sector," said Peter McIntyre, investment advisor at Craigs Investment Partners. "Overnight there was good news out of Facebook, and here tech stock responded to that."

Diligent, which is in the process of restating its accounts, rose 2.6 percent to $4.35. Fellow tech stock, cloud-based accounting software company Xero also gained 1.8 percent to $41.49. The Wellington-based company said its cash-burn rose at a slower pace in the December quarter.

The market considered Reserve Bank governor Graeme Wheeler's reiterated promise to hike interest rates, causing dividend paying investments, like property stock, to lose their appeal.

"The market is in a state of flux at the moment. We've had low interest rates for a period of three years now," said McIntyre. "So we are seeing some rejigging over stocks that are interest rate sensitive."

Precinct Properties New Zealand dropped 1 percent to 98.5 cents, Property for Industry declined 0.4 percent to $1.265. Goodman Property slid 0.5 percent to 96.5 cents, and Argosy Property fell 0.6 percent to 91 cents. DNZ Property Fund was unchanged at $1.52

Blue chip stocks were up, with New Zealand's biggest company Fletcher Building gaining 2.4 percent to $9.08. Auction website Trade Me Group climbed 1.7 percent to $4.09. Telecom was up 1.3 percent to $2.35, and casino operator Skycity Entertainment group rose 0.5 percent to $3.87.

Fonterra Shareholders Fund gained 0.6 percent to $6.30 after government figures showed growing dairy exports boosted the trade balance to a surplus of $523 million in December.

(BusinessDesk)

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1 Comment & Question

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I'd love to see the evidence that says Diligent shares were linked with Facebook's price rise. Correlation does not imply causation. Maybe Diligent is just cheap relative to its forecasted earnings, and people realise there are gains to be had there? Sloppy work by the broker.

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NZ Market Snapshot

Forex

Sym Price Change
USD 0.7407 -0.0007 -0.09%
AUD 0.9347 -0.0066 -0.70%
EUR 0.6571 -0.0092 -1.38%
GBP 0.4908 -0.0035 -0.71%
HKD 5.7439 -0.0036 -0.06%
JPY 87.6920 0.6960 0.80%

Commods

Commodity Price Change Time
Gold Index 1292.6 -7.090 2015-01-23T00:
Oil Brent 49.9 0.320 2015-01-23T00:
Oil Nymex 45.6 -0.820 2015-01-23T00:
Silver Index 18.3 -0.060 2015-01-23T00:

Indices

Symbol Open High Last %
NZX 50 5675.2 5703.0 5675.2 0.41%
NASDAQ 4752.4 4767.1 4757.9 0.16%
DAX 10593.0 10807.6 10649.6 1.40%
DJI 17668.1 17688.3 17672.6 -0.10%
FTSE 6832.8 6855.9 6832.8 0.29%
HKSE 24907.2 24916.5 24850.5 0.24%
NI225 17285.7 17471.9 17511.8 -0.25%