Market close: shares rise - Diligent, Xero soar as risk appetite grows

New Zealand shares rose, nudging the NZX 50 Index to a new record, as investors continued to bid up the future earnings potential of Diligent Board Member Services and Xero. Sky Network Television continued its run unfettered by News Corp.

The NZX 50 rose 9.72 points, or 0.2 percent, to 4548.71, continuing the ascent of the gross index created in 2003. Within the index, 24 stocks rose, 18 fell and eight were unchanged. Turnover was $116 million.

Xero rose 6.2 percent to $13.80, the second-highest price on the NZX 50 after Port of Tauranga, valuing the company at $1.62 billion. Xero is up 15 percent in the week.

Diligent, which has attempted to clean up discrepancies in its CEO's options, gained 5.3 percent to $7.50 - a 12-month rise of 103 percent.

"I'd be exceptionally wary at these levels as a fundamentals-based investor," says Matt Goodson, portfolio manager at BT Funds Management. "They're clearly pricing in many years of growth."

The NZX 50 rose even as major stocks Fletcher Building, Telecom and Contact Energy fell. Fletcher shed 0.6 percent to $8.66, Telecom fell 1.7 percent to $2.565 and Contact declined 0.6 percent to $5.35. The index is up 11.6 percent this year.

"People are starting to talk about a bubble in our market," Mr Goodson says. Stocks were initially cheap versus bonds but "that cheapness is well and truly removed".

OceanaGold, one of the most volatile stocks in the index, rose 9.6 percent to $2.62. Gold rose $US7.30 an ounce at $US1474.29 in Asian trading.

Sky TV rose 2.2 percent to $5.58 and is up 11 percent year-to-date. The company's shares are more liquid since News Corp sold its 46 percent holding.

Delegat's Group was unchanged at $3.78. Today the winemaker said it had bought the assets of Australia's Barossa Valley Estate out of receivership for $A24.7 million, just two months after snapping up the distressed vineyard and winery assets of Matariki Wines and Stony Bay Wines.

Ryman Healthcare advanced 0.9 percent to $5.73.

Shares in alternative milk marketer A2 Corp jumped 7.9 percent to 68 cents after government figures showed China was now New Zealand's biggest export destination, ousting Australia. A2 this week announced the start of sales in the world's most populous nation.

Trade Me gained 0.4 percent to $5.01 after French banking group BNP Paribas emerged as a substantial shareholder in the online auction site. The French bank holds 5.3 percent of Trade Me, according to a filing to the ASX.

(BusinessDesk)