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MARKET CLOSE: Shares rise, NZX gains on IPOs, Fletcher, Summerset advance

New Zealand shares rose as investors mulled the latest in a series of initial public offerings. NZX paced gains on the promise of a growing capital market. Xero, Mainfreight and Fletcher Building rose.

The NZX 50 Index rose 21.511 points, or 0.4 percent, to 5188.905. Within the index, 27 stocks rose, 12 fell and 11 were unchanged. Turnover was $90 million, a quieter day ahead of the Independence Day holiday in the US.

The New Zealand market lagged gains across the Asia Pacific, as Japan's Nikkei 225 Index climbed 0.6 percent in afternoon trading and Australia's S&P/ASX 200 Index advanced 0.7 percent, following a rally on Wall Street overnight with the Dow Jones Industrial Average closing above 17,000 for the first time. On the local market, investors mulled the outcome of two bookbuilds, a new listing and the possibility of slower economic growth amid weaker dairy prices and an elevated currency.

"New Zealand is under performing most of the offshore markets, just a fraction firmer," said Grant Williamson, director at Hamilton Hindin Greene. "There are a number of reasons, the level of IPOs coming to the market is causing investors to take money out of the market and other stocks to raise funds.

"I also think the high dollar is not really helping, well over 87 cents against the US and 93 cents against the Australian - that is starting to weigh on markets as well. I think also the talk on the dairy payout has probably got investors thinking what that is going to do to the overall economic growth in New Zealand."

The bookbuilds for Metro Performance Glass and Scales Corp closed yesterday, with the companies priced at the lower end of their indicative ranges at $1.70 per share and $1.60 per share respectively. The companies will list on the NZX later this month. Vista Group International lodged its prospectus with the Companies Office today, and will sell shares between $2.10 to $2.70 as it looks to raise up to $100.3 million with $40 million of new capital to further expand its cinema software, film distribution,and data analytics offerings globally.

NZX climbed 3.1 percent to $1.34,and has gained 4.8 percent this year, with the stock market operator set to benefit from a growing capital market. NZX's June metrics data earlier this week showed the number of trades rose 15 percent in the month from a year earlier and daily average value traded rose 3.3 percent to $146 million and total value traded advanced 8.8 percent to $2.9 billion.

"With the capital markets growing all the time it is very good news for NZX. Of course we had some data out earlier in the week, the June metrics that was positive as well," Williamson said.

Outside the benchmark index, the three most recent companies to list have been mixed. Serko, the travel booking software company, fell 1 percent to $1.01, below its June listing initial price of $1.10. Gentrack Group, the airports and utilities software developer, rose 1.1 percent to $2.70, from its June listing price of $2.40. Intueri Education Group, the private education provider, advanced 1.1 percent to $2.73, above its May listing price of $2.35.

Summerset Holdings advanced 0.9 percent to $3.43. The,Wellington-based retirement village operator said it sold 103 occupation rights in the second quarter, compared with 100 in the same quarter last year. That equates to growth of 3 percent, compared with a gain of 23 percent in the same quarter last year.

Air New Zealand, the national carrier, rose 0.2 percent to $2.175. Chief executive Christopher Luxon has been appointed to Virgin Australia's board alongside Etihad Airways' James Hogan, and Goh Choon Phong of Singapore Airlines, representing their major stakeholder positions in Australia's budget carrier. Overall, 79 percent of the company is split between the three airlines and Richard Branson's Virgin Group. Air NZ has a 26 percent stake in the airline.

Mainfreight, the logistics company, led the index higher up 3.1 percent to $14.85. Xero, the cloud-based accounting system firm, rose 2.2 percent to $26.78. Fletcher Building, New Zealand's largest listed business, gained 1.4 percent to $8.97. Telecom Corp, the nation's largest telecommunications provider, fell 0.2 percent to $2.695.

OceanaGold was the worst performer on the day, down 1.7 percent to $3.42.

On the NZ Alternative index, GeoOp, whose software allows mobile businesses such as builders to manage their workforce, slid 6.1 percent to a record low of 92 cents, below its debut price of $2.40 in October last year and has plunged 80 percent from its high of $4.49 in November. The company raised $10 million at $1 a share in a private offer before listing, which it said at the time was more than three times oversubscribed.

(BusinessDesk)

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