MARKET CLOSE: Xero drops in heavy trading on leaving NZX50

New Zealand shares gained in heavy turnover as Xero dropped on leaving the benchmark index, while Comvita and Contact Energy gained.

The S&P/NZX50 Index rose 0.4 percent, or 37.11 points, to 8,360.86. Within the index, 36 rose, 11 fell and three were unchanged. Turnover was $426 million.

Comvita was the best performer, up 7.3 percent to $7.99, with Contact Energy gaining 4.5 percent to $5.78 and CBL Corp up 3.6 percent to $3.14.

James Smalley, investment advisor at Hamilton Hindin Greene, said property stocks have gained recently, with Argosy Property up 1.9 percent to $1.10, Kiwi Property gaining 1.4 percent to $1.405, Precinct Properties gaining 0.8 percent to $1.35 and Investore Property advancing 0.7 percent to $1.46.

"Compared to a stock like A2 they don't have great ups and downs, but as a sector they have been going up," Smalley said. "We've had a number of really chunky redemptions lately and people have been hunting around even more so for that yield story. That has maybe been underpinning volumes through the market as of late. There's a lot of money sloshing around looking for a bit of yield."

Xero dropped 4.4 percent to $28.20. The stock was removed from the NZX50 index today, but remains on the main board until Jan. 31. It saw over $110 million in turnover today.

"It's continuing to be affected by gradual de-weighting of holdings," Smalley said. "They're ending the week below the psychological $30 barrier. If you're an investor who judges a move by the impact on the share price, you probably wouldn't be too happy with the decision they've made."

A2 Milk dipped 2.3 percent to $7.76 and Metro Performance Glass fell 2 percent to 97 cents.

Outside the benchmark index,Trilogy International rose 22.9 percent to $2.79. Chinese investment manager CITIC Capital Partners, which oversees US$4.7 billion of assets, has offered $211 million to buy Trilogy at $2.90 per share, a 28 percent premium.

Auckland-based Trilogy said it has entered a scheme of arrangement with CITIC Capital to sell the shares, which closed Thursday at $2.27 but peaked at $5 in August 2016. The Business Bakery, which holds 31.2 percent of shares on issue, intends to sell if the board recommends the deal.

"They've already got acceptance of a major shareholder so they're very close to getting over the 50 percent threshold," Smalley said. "I can't remember a scheme of arrangement takeover that hasn't succeeded."

Smartpay Holdings dropped 8.7 percent to 21 cents. Australian investment firm Pemba Capital Partners won't go ahead with plans to buy payment terminal provider Smartpay for $40.4 million after wrapping up due diligence. The Sydney-based firm put forward an indicative offer of 23.5 cents a share in August and was granted due diligence access last month, but today ended its pursuit of the payments company.

(BusinessDesk)