23 Oct 2013

Sharemarket rises for third day

7:15 pm on 23 October 2013

The share market rose for a third day, the benchmark Top 50 Index gaining 45 points to 4876.

Murray & Co Wealth Management director Johnny Cochrane says heavy hitters, such as accounting software company Xero, helped push the index higher while the biotech stock, Pacific Edge, also made strong gains.

He says it's at a stage in the economic cycle where there is a strong rotation out of defensive equities into growth areas.

Mr Cochrane says as that capital rotates into high quality businesses like Xero and businesses with good strategic opportunities like Pacific Edge it has a big impact on those share prices because of the size of the business relative to the size of the market.

He says in the New Zealand market this year Xero and a number of index trackers have been underweight.

"Xero and as the stocks perform strongly, that's been a painful experience for them from a relative performance point of view and it's easy to see those players not wanting to make the same mistake with a company like Pacific Edge."

Xero shares jumped another $1.25 to $29.55 on Wednesday while Pacific Edge shares gained 31 cents to $1.37.

Pacific Edge shares peaked at $1.75 earlier on Wednesday but fell after the company announced plans to raise up to $20.5 million through a two-for-15 rights issue priced at 55 cents per share.