MARKET CLOSE: NZX 50 rises to a record, Genesis, PFI gain, Xero falls

New Zealand shares rose paced by Genesis Energy and Property For Industry, on good sentiment around the local economy and demand for dividend paying stocks. Xero fell as investors took the chance to crystalise profits from its recent surge.

The NZX 50 Index rose 16.79 points, or 0.3 percent, to a fresh record of 5878.472. Within the index, 30 stocks rose, 12 fell and eight were unchanged. Turnover was $192 million.

The local bourse has been pushed higher by demand for income paying stocks, like utilities, property investors and telecommunication companies, in a globally low inflation and interest rate environment. Meanwhile rising inward bound migration and building consents data has pointed to continued growth in the New Zealand economy, boosting sentiment for local businesses.

Dividend paying stocks rose. Property For Industry gained 1.3 percent to $1.60. Genesis rose 1.1 percent to $2.24. Contact Energy advanced 1 percent to $6.18. Meridian Energy gained 0.9 percent to $2.17. Goodman Property Trust increased 0.8 percent to $1.195. Kiwi Property Group gained 0.4 percent to $1.315.

"Economic data continues to be pretty strong, the migration numbers we saw were very strong, and building consents were very strong so you get the feeling the economy is chugging along nicely," said Mark Lister, head of private wealth research at Craigs Investment Partners. "It all comes back to where interest rates are, and while interest rates remain languishing at levels where they are at the moment, and people are talking about them going even lower, in a relative sense the market doesn't look too expensive."

Xero fell 1.2 percent to $24.70 after surging some 26 percent this week. On Wednesday the cloud-based accounting software firm announced Silicon Valley venture capital firm Accel Partners and Matrix Capital Management, its biggest shareholder, invested $147 million in the firm, doubling its cash balance to $285 million. The jump in share price has contributed to the rise in the benchmark index this week, Lister said.

"They've had a stellar week, and that's dragged the NZX 50 index up and probably makes its look artificially strong when it's down to one stock," Lister said. "Three weeks ago it was at $16 so it's gone from $16 to almost $25, so that's a rally of 50 percent. Anything that rallies that strongly in a matter of days is going to inevitably see a few people go 'jeez that was a good trade, I'll take that cash and move onto something else'."

Precinct Properties New Zealand was the worst performer on the benchmark index today, falling 2.9 percent to $1.19. The property investor raised $73.6 million from institutional investors in a one-for-seven offer with shares priced at $1.15 apiece. The company is raising $174.1 million to fund a major development in the country's largest city.

Kathmandu Holdings, the outdoor goods retailer, led the benchmark index higher, up 4 percent to $1.58.

Outside the benchmark index, Allied Farmers fell 3 percent to 6.5 cents. The livestock company, which is rebuilding after taking over the failed Hanover and United Finance loan books, turned to a profit of $907,000 in the first-half as its livestock division exceeded expectations but flagged second-half sales may be weaker because of uncertainty around the dairy payout.

Delegat Group rose 1.1 percent to $4.65. New Zealand's largest listed wine company posted a 45 per cent drop in first-half profit to $9.8 million, mainly caused by a $10.7 million writedown of its vines and grapes and losses on derivative instruments used to limit its foreign currency exposure. Its shares were unchanged at $4.60.

Vista Group International rose 3.5 percent to $4.50. The cinema software and analytics company reported a smaller drop in annual profit than forecast in last year's offer document as sales climbed 55 percent on rapid growth in its core cinema software division. Net profit fell to $3.99 million from $5.71 million a year earlier, beating its July prospectus forecast for $3.44 million.

(BusinessDesk)