MARKET CLOSE: NZX50 edges to fresh record; Xero, Air NZ gain as Kathmandu declines

Thursday 5th November 2015

New Zealand shares edged to a fresh record, led by Xero as it extended gains after reporting its first-half result. Air New Zealand advanced after it said it would buy more planes, while Kathmandu Holdings declined.

The S&P/NZX 50 Index rose 2.42 points or 0.04 percent to 6073.63. Within the index stocks were mixed, with 21 up, 17 down and 12 unchanged. Turnover was $102 million.

Xero led the benchmark index higher, up 2.8 percent, to a four-month high of $18.24, and is the best performer over the past month, gaining 19 percent. The cloud based accounting software developer, which is foregoing profits to expand sales, posted a wider first-half loss even as revenue increased 71 percent of $44.3 million, and said it wants to maintain the current annual cash burn through the rest of the year.

"We're seeing Xero recover over the past few months," said Rickey Ward, head of NZ equities at JBWere New Zealand. "It was hard to predict the big fall down from $45 down to $12, because it is sometimes a volatile stock.

Air New Zealand advanced 1.4 percent to $2.84. The national carrier is purchasing 15 new ATR72-600 aircraft worth a total US$375 million as regional competition hots up. Eleven of the new aircraft will replace the airline’s ageing 72-500 fleet while the remaining four will allow for growth on regional routes on which Air New Zealand is facing fresh competition from Qantas offshoot Jetstar.

Z Energy fell 0.6 percent to $6.71. The petrol station chain seeking to take over rival Chevron New Zealand lifted first-half earnings 15 percent to $105 million in the six months ended Sept. 30 as it fattened its margins in a tightly contested market, ceding market share and revenue in the process.

MightyRiverPower rose 1.1 percent to $2.80. The electricity generator and retailer has signalled it may face additional costs associated with its Chilean geothermal assets, for which it has failed to find a buyer and may require spending on site remediation, chief executive Fraser Whineray told the company's annual meeting in Auckland.

Kathamndu, the outdoor retail chain, was the worst performer on the benchmark index, down 2.5 percent to $1.54. Fellow retailer Warehouse Group declined 1.5 percent to $2.71 and Briscoe Group fell 1.4 percent to $2.83.

On the NXT market, Snakk Media fell 4 percent to 4.8 cents after migrating from the NZ Alternative Index to the new small-to-medium size exchange. The mobile advertisement publisher raised $2.2 million from investors via a share offer.

BusinessDesk.co.nz

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