MARKET WRAP: NZ shares rise, Xero flies

New Zealand shares gained today, but all eyes were on Xero across the Tasman.

New Zealand shares gained slightly today, encouraged by strong performances from a2 Milk and Briscoe Group. 

The S&P NZX 50 index was up 38 points to 8587, on turnover of $93 million.

Westpac revealed its group statutory net profit rose 7% to $A4.2 billion. That was enough to keep investors interested, the bank's shares rose 1.28% to $31.65.

Harbour Asset Management analyst Shane Solly says Westpac is still under pressure following the Royal Commission’s findings in Australia.

“It still needs to deliver some better statistics to get more support from investors, there’s a bit of work to be done there.”

On Friday, the Financial Markets Authority and the Reserve Bank issued an ultimatum to all banks registered in New Zealand requiring them to provide evidence that they don’t share the shortcomings of their Australian parents.

Briscoe Group continues to impress, its shares gaining 1.75% to $3.48.

Mr Solly says the retail sector is still showing some growth but is under pressure globally.

“The Briscoe team continue to do a great job of understanding what Kiwi’s want at a great price."

Mr Solly says the New Zealand market was lifted by a2 Milk, which caused a bit of a stir in the US, calling out the national dairy council for not supporting its research and stimulating demand for dairy.

He also says the company also picked up some interest after “solid” baby formula sale statistics from China were revealed.

A2 shares last traded at $13.17, a 1.15% gain.

Chorus shares dropped after the Economic Development, Science and Innovation Select Committee recommended some restrictions on the company which runs most of New Zealand’s fibre network.

The stock slipped 1.2% to $4.11.

Across the Tasman the talk of the day was Xero, its shares were up 2.72% to $A41.16 in mid-morning trading on the ASX, for an all-time high market capitalisation of $A5.56 billion ($NZ5.76b), edging ahead of its previous high during its 2014 spike.

Mr Solly says Xero's stock is getting new interest from Australian institutional investors.

“There’s been a lot of stockbroking and research pieces coming through recently highlighting the longer-term growth potential.”

Investors will be eagerly awaiting Xero’s full-year result, which will be announced on Thursday.

New Zealand is also edging into reporting season, with some key results coming later this week including Fisher & Paykel Healthcare, Mainfreight, Ryman Healthcare and Z Energy.

Mr Solly says there will be plenty of lead indicators globally and company-specific data to keep an eye on throughout the week, starting with the Reserve Bank survey of expectations, which will be released tomorrow.

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