MARKET CLOSE: NZX stars on the market

Friday 20th May 2011 1 Comment

NZX was a star in its own market today, closing up 9c to $2.51 and trading as high as $2.59, after the Government set Treasury to work on extending the so-called mixed ownership model to state-owned Mighty River, Meridian, Genesis and Solid Energy and on reducing the Government's 75 percent holding in Air New Zealand.

The Government will keep a majority by owning more than 51 percent of the companies. The benchmark NZX-50 index closed up 8.447 points, or 0.237 percent, at 3577.443.

"The floats could add some real grunt to the NZX," said Grant Williamson at Hamilton, Hindin, Greene.

NZX shares were last at these levels in late 2009. Air NZ shares rose a cent to $1.12, while Contact Energy eased 2c to $6.00.

Ryman Healthcare rose to a record $2.79 and closed up 8c at $2.76 after the aged care and retirement village operator yesterday announced a 17 percent rise in full-year underlying profit to $72 million.

Williamson said there was strong demand for the stock as investors recognised its long-term potential.

Telecom eased 2c to $2.30. Finance Minister Bill English said yesterday that a decision on the Government's ultrafast broadband rollout was due shortly.

Williamson said the stock had pulled back after being the subject of strong demand earlier in the week. Vector, another broadband bidder, was unchanged at $2.50. Fletcher Building rose 7c to $9.18 and Skellerup rose 1c to $2.52.

Sky TV lifted a cent to $5.74, and Auckland Airport added 1.5c to $2.32. OceanaGold lost 12c to $3.00 after gold and silver prices fell as weak housing and manufacturing data in the United States and uncertainty about the end of the Federal Reserve's bond-buying programme dragged down commodities across the board. In the US, the biggest internet initial public offering since Google combined with a drop in oil prices to send the broad stock market higher.

Shares of social networking company LinkedIn jumped 109 percent to US$94.25 on the first day they began trading on the New York Stock Exchange.

The debut is seen as a preview of other social networking sites that are expected to start trading during the next year.

"LinkedIn represents the first opportunity for the average investor to participate in what looks like a lasting, powerful trend of social media," said Lawrence Creatura, a portfolio manager at Federated Investors.

"They're frothy with excitement, and that's being imputed into the share price." The Dow Jones industrial average rose 0.4 percent to close at 12,605.32, the Standard & Poor's 500 gained 0.2 percent to 1343.60, and the Nasdaq composite index rose 0.3 percent to 2823.31.

Comments from our readers

On 21 May 2011 at 4:03 pm Niice one said:

Social networking sites IPOs - sounds like the dot com bubble round 2. Good opportunity for hedge fund managers and traders. A bubble in the making.