Xero soars as market closes higher

Xero shares leaped 12.77 per cent today as investors reasoned that if Sam Morgan puts more money into a company it must be a winner.

Xero shares closed up 18c at 159 in a market that otherwise struggled to replicate a strong performance by Wall Street.

The benchmark NZX-50 index closed up 13.548 points, or 0.454 per cent, at 2994.904.

The accounting software company told shareholders at its annual meeting yesterday that the founder of Trade Me is upping his stake by buying 1.4 million shares at $1.45 each from founders and executives.

"Morgan's move is certainly giving investors confidence to buy the stock," said Grant Williamson, director at Hamilton, Hindin, Greene. "He obviously has a number of followers."

Otherwise the local market's performance was "nothing" compared to Wall Street's rise.

Low volumes are a continuing feature of the local market ahead of the corporate reporting season. Yet Xero yesterday paid tribute to the role the market played in its development.

"A key part of Xero's strategy has been to have the capital to do things properly. This is why Xero listed in mid 2007 within a year of being founded, raising $15 million to establish the business and create its initial product suite," chairman Phil Norman told the meeting.

Telecom rose 1c to 196, Fletcher Building fell 1c to 763 and Contact Energy was unchanged at 566.

Rakon rose 3c to 98 after predicting record shipments from its Auckland factory this month.

New Zealand Farming Systems Uruguay, which today outlined the makeup of a board committee to consider the offer from Olam International, rose 1c to 55.

Pike River Coal rose 2c to 95, NZX rose 3c to 149 and The Warehouse rose 3c to 356. SkyCity rose 4c to 296.

Air New Zealand, which today advocated airline ownership of Queenstown Airport, rose 3c to 111, while Auckland Airport, which has invested in Queenstown Airport, rose 4c to 196.

The losers were fewer in number but included Ebos, down 3c to 615, Hallenstein Glassons, down 3c to 360, and Cavalier Carpets, down 1c to 250.

OceanaGold continued a strong run, rising 5c to 405.

In the United States, earnings from economic bellwethers 3M, UPS and Caterpillar catapulted US stocks as investors shed some of their fears about the strength of the US recovery.

The major indexes posted their largest daily gains in more than two weeks, led by United Parcel Service Inc, which rose 5.2 per cent after it raised its profit outlook. The world's largest package delivery company is viewed as a barometer of consumer and business demand.

The Dow Jones industrial average gained 2 per cent to 10,322.30, the Standard & Poor's 500 added 2.3 per cent to 1093.67, and the Nasdaq Composite rose 2.7 per cent to 2245.89.

- NZPA