New Zealand shares rose as overseas investors continue to chase export-orientated growth stocks, with Synlait Milk and Xero extending gains while taking booking profits from Fisher & Paykel Healthcare's recent rally.
The S&P/NZX50 Index edged up 7.14 points, or 0.008 percent, to 8,068.12. Within the index, 28 stocks rose, 13 fell and nine were unchanged. Turnover was $157 million.
"The market has certainly taken in its stride post-election - there were a couple of slow trading days but since then it has been onwards and upwards, though it is being driven by half a dozen stocks," said Peter McIntyre, investment adviser at Craigs Investment Partners. "That order flow really starts to pick up in the afternoon when the Australian market opens - that offshore funds flow coming into the marketplace, particularly for the stocks that have good liquidity and are sought after: A2, Fisher & Paykel, Xero and Synlait has also caught investors' attention. They are tending to be growth-oriented stories as well."
Synlait Milk led the index, up 6 per cent to $7.46, a fresh record. Xero rose 0.3 per cent to $34.05 while A2 Milk dipped 0.1 per cent to $7.74. Synlait has gained over the past fortnight after gaining approval from Chinese regulatory authorities to export infant formula it provides to A2 Milk.
"A number of investors are keen to have a stake in Synlait. They are the primary producer for A2 Milk and I wonder whether some parts of the market think they may have some ability to increase prices and become more profitable," McIntyre said.
Fisher & Paykel Healthcare was the worst performer, down 3 per cent to $12.66. The stock has gained 53 per cent this year and spiked to a record $13.05 yesterday.
"There have been a couple of reports from brokers saying the share price has got ahead of itself and their price target is a bit less than where the shares are currently trading, so you've got some profit taking today," McIntyre said "It raced over that $13 mark for a period of time but some parts of the market are thinking it's got ahead of itself and it's no surprise to see it pull back, on pretty good volumes."
Restaurant Brands New Zealand rose 2.2 per cent to $6.90. The fast food retailer today said it renewed its current $125m unsecured main bank lending facility with Westpac for a further three-year term, and negotiated a new three-year A$50m (NZ$5.5m) unsecured facility on similar terms with The Bank of Tokyo-Mitsubishi after a competitive tender.
"It has been a good performer, their acquisitions have been keenly received by the marketplace," McIntyre said. "Funding for them in this market is obviously achievable at good rates and this is what we've seen today."
Z Energy gained 1.7 per cent to $7.23. McIntyre said the stock was rebounding, albeit on low volume, as investors thought it may have been oversold recently.
Outside the benchmark index, Rakon gained 14 per cent to 25 cents. It has sold about a fifth of its shares in start-up investment Thinxtra for A$3m, which it will use to pay off debt, and lifted its earnings expectations for 2018.
Serko rose 22 per cent to $1.10. An earnings upgrade this week has seen the stock soar 77 per cent to near its record high of $1.20.
Scott Technology advanced 0.7 per cent to $3.12. It boosted annual profit 26 per cent to $10.3m as the growing demand for productivity gains through automation and robotics stoked demand for the manufacturer's industrial systems.
NXT-listed G3 Group announced it will quit the small-cap index next week, just two years after joining the market for minnows in a compliance listing. The shares last traded in February, at 64 cents.