17 Mar 2013

Shares end week higher

7:31 am on 17 March 2013

New Zealand stocks ended the week on a high note, with the NZX 50 Index edging up to a new record.

The NZX 50 rose 5.95 points (or 0.1%) to 4387.05, bringing its gain this year to 7.7%. Within the index, 25 stocks rose, 19 fell and six were unchanged. Turnover was a higher-than-average $303 million.

Trading was led by Telecom, with larger than usual turnover in Infratil, Sky TV, Ryman Healthcare and Contact Energy, which traders said reflected portfolio adjustments by institutions.

Xero gained 7% to a record close of $10.70 and has soared 206% in the past 12 months as more investors bet on its ability to grow global scale and eventually translate sales into earnings.

Helping stoke the appeal of cloud-based services, the Department of Internal Affairs this week launched a tender for an all-of-government Desktop-as-a-Service contract. The New Zealand government's use of cloud computing is "helpful" to Xero, said Shane Solly, portfolio manager at Mint Asset Management.

Sky TV rose 1.5% to $5.35, with almost 5 million shares changing hands. Volumes of trade in the stock have climbed since News Corp exited its 44% stake in the company, boosting liquidity in a stock that has a historical dividend yield of 6.5%.

Telecom fell 2.2% to $2.23, with a higher-than-average 32.7 million shares changing hands. The shares have dipped this week after the company announced plans to wind back its Gen-I unit in Australia, cutting two-thirds of employees at the business.

Infratil, the investment company managed by Wellington-based Morrison& Co, was unchanged at $2.41 with 8.7 million shares changing hands - about 1.5% of the company. The company has held investor briefings on its diverse portfolio and has flagged the potential selldown of its Z Energy service stations into a separately listed firm.

Among property investors, Vital Healthcare rose 4.5% to $1.39 and Kiwi Income Property Trust gained 1.3% to $1.18.

PGG Wrightson, the nation's largest rural services company, fell 7.7% to 36 cents after its 50.2% owner Agria Corp reported a wider first-half loss after taking an impairment against rent it had paid on un-used farmland it leases from village collectives and the loss on the sale of an asset.

Ryman rose 1.3% to $4.78 and Contact gained 2.2% to $5.59.

Fisher & Paykel Healthcare fell 4.1% to $2.60 having reached a multi-year high the previous day as the kiwi dollar fell. Fletcher Building, the biggest company on the NZX 50, was unchanged at $9.15.