MARKET CLOSE: Shares rise on tech relief-rally led by Pacific Edge
NZ Stocks rose led by Pacific Edge as investors re-evaluate prices of tech stocks after the recent a sell-off in the sector worldwide. Xero extended its decline.
The NZX 50 Index rose 12.746 points, or about 0.3 percent, to 5076.285. Within the index, 26 stocks rose, 14 fell and 10 were unchanged. Turnover was $110.8 million.
The tech-heavy Nasdaq Composite Index rallied overnight after heavy selling last week saw it decline to its lowest level since February, leading some to call the selling a 'tech wreck'. Over the past month tech and biotech stocks have been sold as investors questioned the ability of the stocks to deliver the profits implied in their high valuations.
Pacific Edge snapped a seven-day decline climbing 5.9 percent to $1.07. The Dunedin-based biotech company has plunged 34 percent in the past month and 39 percent from a record-high $1.76 in February. Xero, the cloud-based accounting software, fell for a third day down 2.9 percent to a six-month low $28.45.
"The most interest in the market has been on the tech rank, and we've seen a fairly mixed performance where the likes of Pacific Edge has bounced up somewhat, following its steep sell-off and Xero bounced initially but has really given it up," said Matthew Goodson, who helps manage $650 million of equities and property holdings for Salt Funds Management. "What investors are having to do is make big bold assumptions about what current trading performance implies for the future."
"The benefit of the doubt is just starting to disappear a bit across that space," said Goodson.
Diligent Board Member Services, the governance app developer, declined 1.7 percent to $4.05.
Tech stocks outside the benchmark index were mixed. Wynyard Group, the software security firm, rose 4 percent to $2.33, GeoOp, which makes a small business task management app, fell 2.3 percent to $1.26, while SLI Systems, the search engine developer, advanced 0.5 percent to $1.91.
Outdoor goods retailer, Kathmandu Holdings, paced gains, up 5.7 percent to $3.89. Warehouse Group, the largest retailer on the bourse, rose 0.9 percent to $3.23 and online auction site Trade Me Group climbed 1 percent to $3.95.
Energy stocks rose before Genesis Energy, the last company in the government's partial privatisation programme, begins trading on the NZX this Thursday.
Contact Energy advanced 2.6 percent to $5.47, government-controlled energy company MightyRiverPower rose 0.7 percent to $2.16 and Meridian Energy climbed 0.9 percent to $1.16. Auckland lines company Vector gained 0.8 percent to $2.48.
Telecom, New Zealand's largest telecommunications provider, climbed 1 percent to an 11-month high of $2.665 after saying it had trimmed the size of its banking facilities and extended its maturity.
Fletcher Building, New Zealand's largest listed company, rose 0.1 percent to $9.60. Fisher & Paykel Healthcare, which makes breathing respirators, fell 1.7 percent to $4.04. Auckland International Airport was unchanged at $3.93.
Goodman Property Trust rose 1.6 percent to 98 cents and Kiwi Income Property Trust gained 0.4 percent to $1.13. DNZ Property Fund was unchanged at $1.55, as was Precinct Properties New Zealand at $1.00 and Property For Industry at $1.285.
Outside the benchmark index, New Zealand Refining fell 1.2 percent to $1.71 after the Marsden Point oil refinery operator said it may receive US$15 million less in processing revenue this year because of a glitch in its maintenance shutdown means it will probably produce less than last year.