Market close: Shares rise as growth optimism stirs – Fletcher, Xero, Telecom gain

BUSINESSDESK: New Zealand shares gained in a rising tide of Asian equities amid optimism the US will take more steps to stimulate its economy, keeping global growth on pace. Fletcher Building, Telecom and Xero all rose.

The NZX 50 Index gained 26.76 points, or 0.8%, to 3485.74. Within the index, 33 stocks rose, six fell and 11 were unchanged. Turnover was $90.7 million.

The Nikkei 225 Index was up almost 1% in early afternoon trading and Singapore’s Straits Times Index gained 1.1%.

Gains in the New Zealand market followed the central bank’s decision to keep interest rates at a record low, while saying domestic economic growth is continuing at a slow pace.

Fletcher, the nation’s biggest construction company, rose 2.3% to $5.90 and are down 6% this year. The stock has an outperform rating on it according to a Reuters survey, with a price target of $7.15 and Australian peers including Boral made gains today.

“If you’re positive on the Australian market – if you think building and construction there is bottoming out you’d probably be attracted to Fletcher,” said Andrew Kelleher of brokerage ASB Securities.

Xero, the cloud-based accounting firm whose shares have gyrated this week, rose 5.1% to $5.20, for a year-to-date gain of 79%.

The Wellington-based company told shareholders at their annual meeting that it is considering a dual-listing on the ASX "to make it easier for Australian partners and customers to purchase shares", it said in a statement to the NZX.

Xero separately added a Silicon Valley software firm executive to its board.

Mainfreight, the biggest transport firm on the bourse, was unchanged at $9.45. Chairman Bruce Plested told shareholders at their annual meeting today that first-quarter results would show “an improved performance for the group” excluding Europe, which on its own would match the weak results of the fourth quarter last year.

OceanaGold, the Macraes gold field operator, rose 2.9% to $2.45. Newcrest Mining, the world’s third-largest gold miner, announced it has met its estimated production while maintaining margins.

Cavalier, the carpet maker, gained 1.9% to $1.59 and appliance maker Fisher & Paykel Appliances rose 1.8% to 57 cents.

APN News & Media, the publisher of the NZ Herald, was unchanged at 65 cents on the NZX and 51 cents on the ASX.

Responding to a query from the ASX as to why its shares fell from 60 Australian cents on July 18 to as low as 51.5 cents yesterday, the company said it had no fresh information though it flagged a potential charge against New Zealand publishing intangible assets.

Telecom, the biggest company on the exchange, rose 0.2% to $2.57.

Heartland New Zealand was the biggest decliner, falling 1.8% to 56 cents.