Article – BusinessDesk
Aug. 31 (BusinessDesk) – New Zealand shares rose, led by Xero, Air New Zealand and Trade Me after the earnings season highlighted how many companies are managing to find growth in a tepid economy. The NZX 50 Index rose 37.11 points, or 1 percent, …
MARKET CLOSE: NZ shares rise, led by Xero, Air NZ, Trade Me
Aug. 31 (BusinessDesk) – New Zealand shares rose, led by Xero, Air New Zealand and Trade Me after the earnings season highlighted how many companies are managing to find growth in a tepid economy.
The NZX 50 Index rose 37.11 points, or 1 percent, to 3666.68. Within the index, 34 shares rose, six fell and 10 were unchanged. Turnover was about $117 million.
“We had seen the market weaken leading into the reporting season – all the stocks had to do was meet guidance and they went up, like Air New Zealand,” said James Smalley, client adviser at Hamilton Hindin Greene. “Investors should be satisfied.”
Air New Zealand shares rose 7.4 percent to $1.09, the highest since September last year. The national carrier slated for a government selldown yesterday beat estimates with a 12 percent drop in annual profit to $71 million. That beat the consensus analyst forecast of $44.5 million.
“Maybe the mixed ownership model isn’t too bad,” Smalley said. “It obviously has a dominant domestic base – its uses that base to branch further,” he said. “It is hard to see a competitor coming in because we are such a small market.”
Xero, the cloud-based accounting platform provider, climbed 7.6 percent to $4.79. The stock has gained about 58 percent this year. The Wellington-based company which joined the NZX 50 in June has doubled its employees, hiring 128 new staff in the calendar year and is seeking 100 more before April next year.
“Investors are focusing on its growth and that will translate into future earnings,” Smalley said. “There is a large amount of good news priced into the stock.”
Trade Me rose 2.9 percent to $3.89. The online auction site is working with payment solutions software firm MYOB to look at ways to integrate its services with its website.
Telecom, New Zealand’s largest listed company, rose 2.1 percent to $2.46. SkyCity Entertainment Group, the casino company in talks with the government to build Auckland’s convention centre, gained 2.7 percent to $3.79.
Postie Plus Group was unchanged at 24 cents and has declined 7.7 percent this year. It reported a 4.4 percent decline in full-year sales after selling its Babycity chain and maintaining little-changed revenue at its Postie clothing outlets.
Pumpkin Patch, the children’s clothing retailer, fell 0.9 percent to $1.10.
The decline was led by Oceanagold, which operates the Macraes gold mine near Dunedin, down 2.3 percent to $3.02.
BLIS Technologies fell 25 percent to 0.9 cent after the NZ-listed biotechnology company widened its forecast 2013 loss to $1.3 million and launched a share purchase plan and placement in a bid to raise up to $1.5 million. The stock has shed about 59 percent this year.
Zintel Group, the NZAX-listed telecommunications company which sold its subsidiary Cogent in July, was unchanged at 43 cents. The stock has surged about 300 percent this year. Zintel will sell the rest of its businesses and pay out shareholders as it prepares to delist from the New Zealand stock exchange.