Market close: shares rise on demand for ‘growth’ stories - Synlait soars

New Zealand shares rose as investors renewed their appetite for growth stories such as Xero and Diligent Board Member Services, while Synlait Milk soared 25 percent in its NZX debut.

The NZX 50 Index gained 26.550 points, or 0.6 percent, to 4580.591. Within the index, 25 stocks rose, nine fell and 16 were unchanged. Turnover was $78 million.

OceanaGold, the operator of the Macraes gold field, rose 4.7 percent to $1.99, mirroring gains in Australian gold miners after spot gold rose for a fourth day to $US1336.84 an ounce in Asia, near the highest in a month.

Xero, the cloud-based accounting company, gained 4.1 percent to $18.10 and Diligent, whose software lets company directors track their workflow, rose 1.6 percent to $6.50.

Ryman Healthcare, the biggest retirement village operator on the bourse, rose 0.3 percent to a record close of $7.

"Stocks perceived as being big growth stories - people are prepared to pay well over the odds to get exposure to that," says Paul Harrison, managing director at Salt Funds Management.

Stocks advanced across Asia on optimism the US Federal Reserve does not plan to suddenly turn off its stimulus tap and after Chinese Premier Li Keqiang was reported as saying the slowest economic growth Beijing will tolerate is 7 percent.

The Chicago Options Exchange Board's Volatility Index, known as Wall Street's 'fear gauge', has fallen to a three-month low.

Synlait, which debuted on the NZX today after raising $75 million in an initial public offering at $2.20 a share, rose 54 cents to $2.74, valuing the company at about $401 million.

Mr Harrison says the appearance of Netherlands-based dairy cooperative Royal FrieslandCampina as a shareholder in the run-up to listing, with a 7.5 percent stake, helped give impetus to the stock on debut.

It showed that a dairy industry player saw in Synlait "a business model that has legs".

Synlait's debut is the most successful since the listing of Fonterra Shareholders' Fund last year. Units of the fund fell 0.1 percent to $7.49 at the close. Mighty River Power, which listed in May, rose 1.7 percent to $2.40, creeping closer to its $2.50 IPO price.

Sky Network Television rose 0.9 percent to $5.38, Contact Energy rose 1.9 percent to $5.47 and Heartland Bank climbed 2.4 percent to 86 cents.

Telecom rose 0.9 percent to $2.335 and Fletcher Building gained 0.4 percent to $8.53.

(BusinessDesk)