Xero powers on amid global rally

By Staff Reporter

Share index rises as retail sales data boosts Wall Street and World Bank lifts its forecasts for global growth

Chorus shares gained about 2% yesterday to close at $1.54. Photo / APN
Chorus shares gained about 2% yesterday to close at $1.54. Photo / APN

New Zealand shares rose yesterday, 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 47.87 points, or about 1 per cent, to 4913.03, the highest since November 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 per cent, and stocks continued to rise in Asia after the World Bank lifted its global growth forecasts. Japan's Nikkei 225 Index climbed 2.2 per cent and Australia's S&P/ASX 200 Index rose about 1 per cent.

Xero gained 5.9 per cent 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 per cent 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 rose 3.6 per cent 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 10c.

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

Chorus, one of the worst performers on the stockmarket last year, gained about 2 per cent 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 per cent to 90c 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 per cent to $8.32, Air New Zealand rose 2.1 per cent to $1.69, Telecom climbed 1.9 per cent to $2.40 and Fletcher Building gained 1.2 per cent to $9.03.

Port of Tauranga rose 1 per cent to $14.75.

- BusinessDesk

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