Market close: Shares snap three-day slide as Xero, Chorus gain
New Zealand shares rose, snapping a three-day slide as equity markets across the Asia-Pacific region generally gained. Xero resumed its climb after two US funds gave the company equity capital and Chorus clawed back from its regulator-induced plunge.
The NZX 50 Index rose 16.11 points, or 0.4%, to 4023.36. Within the index, 23 stocks rose, 14 fell and 13 were unchanged. Turnover was $131 million.
Xero, the cloud-based accounting service, rose 5.6% to $7.60, edging back to the record high $7.75 reached on Monday, having raised $60 million selling shares to Peter Thiel-backed Valar Ventures and Matrix Capital.
That is enough funds for three years at the current burn rate.
"Clearly, there's been quite a substantial change in the makeup of the register," says Shane Solly, portfolio manager at Mint Asset Management. Xero now has "a bit of capital to support the growth".
Chorus, the network company spun off from Telecom last year, rose 2.2% to $2.85, its second daily gain after a two-day, 18.5% slump after the Commerce Commission released a draft determination the company said could slash annual pretax earnings as much as $160 million.
"We're still in the depths of uncertainty with Chorus," Mr Solly says. "People particularly concerned have done their selling.
"For a lot of New Zealand businesses, where the regulator's been involved New Zealand doesn't have a great track record."
OceanaGold, whose interest range from the Macraes goldfield in central Otago to its Didipio project in the Philippines, fell 1.9% to $3.53, extending yesterday's 12.2% slump after the company unexpected raised $C93.3 million selling 30 million shares for $C3.11 apiece in Canada.
"There's a bit of surprise the company raised capital when people didn't think they needed to," Mr Solly says.
Fletcher Building, the biggest company on the NZX 50, rose 1.5% to $7.97.
The Reserve Bank kept its official cash rate at a record low 2.5%, helping anchor mortgage rates and allowing the housing market top continue its revival.
Telecom rose 0.2% to $2.275.
Postie Plus Group rose 5% to 21 cents after announcing it has again avoided a breach of its banking covenants and gained a 12-month extension on its facilities.
Bank of New Zealand completed its annual review of the banking facilities," the Christchurch-based company says in a statement.
Pumpkin Patch, the children's clothing retailer, rose 4% to $1.30 and carpet maker Cavalier was up 3% to $1.71.
NZX, the stock market operator, rose 1.7% to $1.23 after holding an investor open day. NZ Oil & Gas climbed 1.7% to 88 cents.