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MARKET CLOSE: Xero hits record, Warehouse, Chorus gain

Staff Reporter
Wed, 11 Jul 2018

New Zealand shares rose, joining a global rally, as demand for so-called growth stocks drove Xero and Wynyard Group to record levels, Warehouse Group led gains in most retailers and Chorus reached a month-high.

The NZX 50 Index advanced 47.875 points, or about 1 percent, to 4913.034, the highest since Nov. 18. Within the index, 30 stocks rose, 11 fell and nine were unchanged. Turnover was $102 million.

Stocks rose on Wall Street after stronger than expected retail sales data, pushing the Nasdaq Composite Index up 1.7 percent, and stocks continued to rise in Asia after the World Bank lifted its global growth forecasts. Japan's Nikkei 225 Index climbed 2.2 percent and Australia's S&P/ASX 200 Index rose about 1 percent.

Xero gained 5.9 percent to $42.35, valuing the cloud based accounting system at $5.4 billion and promoting the company to second-largest on the benchmark index behind Fletcher Building. Security software company Wynyard Group gained 7.7 percent to a record close of $2.25.

"The juggernaut that is Xero continues," said James Smalley, a director at Hamilton Hindin Greene. "Investors are prepared to pay for growth but the key will be those companies need to deliver on that growth. If you don't meet the forecasts the market can be very savage."

"Global markets certainly had a positive influence" on New Zealand shares, he said.

Warehouse Group, the biggest listed retailer, rose 3.6 percent to $3.79 after agreeing to buy the SchoolTex school uniform business of clothing chain Postie Plus for $9 million. Postie Plus was unchanged at 10 cents.

Kathmandu rose 0.9 percent to $3.35, Michael Hill International gained 0.7 percent, $1.45 and Hallenstein Glasson Holdings rose 2.7 percent to $4.25.

Chorus, one of the worst performers on the bourse last year, gained about 2 percent to $1.54. The network company is awaiting the government's decision on whether it will push back on regulated pricing set by the Commerce Commission which Chorus says hinders its ability to build the nation's ultrafast broadband network.

"Chorus, which as the Queen might say, last year had an annus horribilis, is recovering quite nicely," Smalley said.

A2 Corp rose 2.3 percent to 90 cents as investors continued to invest in the outlook for dairy products. Fonterra Shareholders' Fund was unchanged at $5.68.

"Interest in the dairy sector certainly continues apace," Smalley said. "Fonterra Shareholders' Fund doesn't seem to be affected by the recall of potentially contaminated E. Coli cream."

Retirement village operator Ryman Healthcare gained 2.2 percent to $8.32, Air New Zealand rose 2.1 percent to $1.69, Telecom climbed 1.9 percent to $2.40 and Fletcher Building gained 1.2 percent to $9.03.

Port of Tauranga rose 1 percent to $14.75, extending is gains since announcing this week it will build a freight hub on the outskirts of Christchurch extending its reach in the South Island.

(BusinessDesk)

Staff Reporter
Wed, 11 Jul 2018
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MARKET CLOSE: Xero hits record, Warehouse, Chorus gain
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