MARKET CLOSE NZ shares mixed; Xero tops $30, NZX 50 slips from record

New Zealand shares were mixed, with the NZX 50 Index slipping from a record high, while Xero rose above $30, leading a rally in companies seen with strong growth potential, including A2 Corp, Diligent Board Member Services and GeoOp.

The NZX 50 fell 3.156 points, or 0.01 percent, to 4910.676. Within the index, 18 stocks fell, 24 rose and seven were unchanged. Turnover was $112 million.

Fletcher Building fell 2.3 percent to $9.60 and as the biggest company on the NZX 50, helped drag the benchmark index lower. Trade Me Group fell 2 percent to $4.41 and Michael Hill International declined 1.9 percent to $1.53.

"The NZX 50 has had a big run," said Shane Solly, portfolio manager at Mint Asset Management. "The New Zealand market isn't unique but it has done particularly well of late. Capital markets have been running on very strong cash inflows and it would be helpful to see earnings catch up" with expectations.

The season of annual meetings will provide companies with an opportunity to update investors on earnings growth. Telecom, which holds its AGM on Friday, was unchanged at $2.35. MightyRiverPower, scheduled for Thursday, dropped 0.7 percent to $2.225. Headwinds include the impact of the high New Zealand dollar on exporters, Solly said.

Westpac Banking Corp fell 1 percent to $39.10 after Australia's second-largest lender gave little in the way of guidance while posting an 8 percent increase in full-year cash earnings. Chief executive Gail Kelly said 2014 "should see us continue to deliver high quality, consistent returns for shareholders."

"Banks have had a strong run in recent years," Solly said. "For them to continue delivering they will need to work on growing credit, maintaining margins."

Xero, the cloud-based accounting firm, gained 2 percent to $30.13, the first time it has cracked $30.

"There are different investors looking on a global basis not just Australia and New Zealand," Solly said. "Time will tell if they are wrong or right." With global economic growth still looking subdued, some investors are being drawn to companies with "abnormally strong growth potential."

Among others in that category, A2 climbed 1.4 percent to 71 cents and Diligent gained 1.2 percent to $4.30.

Outdoor equipment chain Kathmandu Holdings gained 1.1 percent to $3.77 after Australian government figures showed better than expected consumer spending across the Tasman in September. Clothing retailer Hallenstein Glasson, which also has a presence in Australia, was unchanged at $4.92.

Moa Group sank 6.3 percent to 75 cents after the beer brewer said its annual loss will probably be at least twice as big as forecast in last year's prospectus, and that the board and management are running a ruler over the operations to improve the profitability and viability of the business model.

Meridian Energy's instalment receipts gained 0.5 percent to $1.10 after Bank of New York Mellon said it lifted its stake in the country's biggest power company to 6.5 percent.

Acurity Health was unchanged at $5.50 after the private hospital owner met first-half earnings guidance with net profit of $4.1 million, and declared an interim dividend of 6 cents per share.

(BusinessDesk)