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New Zealand's benchmark stock index rose to a new record as investors latched on to companies with strong growth outlooks including A2 Milk Co, Xero and Fisher & Paykel Healthcare. Z Energy and Fletcher Building fell.
The S&P/NZX50 Index rose 27.53 points, or 0.3 per cent, to 8,037.81. Within the index, 23 stocks rose, 17 fell and 10 were unchanged. Turnover was $174 million.
A2 Milk led the index higher, up 3.3 per cent to $7.60, a new record. At $5.6 billion the company's market capitalisation surpassed Fletcher Building's market value at $5.4b. Fletcher fell 1.5 per cent to $7.76.
"The last couple of months have seen a meteoric rise, but the sharemarket is littered with examples of stocks that have been priced to perfection but don't deliver. Let's just say there's a lot of good news being priced in at the moment," said James Smalley, senior advisor at Hamilton Hindin Greene. "Foreign investors are really still continuing to buy into the A2 story, and it will be interesting to see when that rise will tail off."
Smalley said A2's rise today was being driven by buying from Australia, and it and other gainers Xero and F&P Healthcare were benefiting from the desire for growth. Xero advanced 2.4 per cent to $2.92 while F&P Healthcare was up 2.1 per cent to $12.88.
"Growth is on the agenda for the market today, and their prospects are all overseas as well, so it doesn't matter too much what happens with domestic politics," he said.
Z Energy was the worst performer, dropping 1.7 per cent to $7.02. In July, a government-commissioned report into fuel prices found areas of concern in petrol pricing, with margins having risen sharply since 2011 and no justification for regional pricing differences.
"It held up briefly after the announcement of the investigation into its margins, but it does look like investors are voting with their feet at the moment," Smalley said. "Maybe they're concerned about a more regulatory-minded environment from a change of government, it certainly seems to be affecting them at the moment."
Vector fell 1.2 per cent to $3.31.
Outside the benchmark index, Serko rose 9.2 per cent to 72 cents after the online travel booking software firm said it expects first-half trading revenue to be at the top end of previous guidance, and reiterated it is expecting to post a maiden annual profit.
Serko said trading revenue was about $9.1m in the six months to September 30, up 30 per cent on the previous first half and at the top end of the 25 per cent to 30 per cent guidance it previously gave. Total income, which includes grants, is expected to be $9.6m.
The company is forecasting first-half earnings before interest, tax, depreciation and amortisation (ebitda) of $1.3m, versus a loss of $1.8m in the prior year, and expects a before-tax profit of $1m in the first half compared to the previous first half's $2m loss.