Xero leads rise on thin trade

Xero shares coped well with the fact that Chris Liddell will step down from the board. Photo / Doug Sherring

New Zealand shares rose, led by Xero after news its chairman is leaving, with Meridian Energy gaining while Air New Zealand dropped. The S&P/NZX 50 Index advanced 3.08 points, or 0.04 per cent, to 7062.36. Within the index, 26 stocks rose, 15 fell and nine were unchanged. Turnover was $100.2 million.

Today, US Federal Reserve chair Janet Yellen said that country's economy was closer to the Federal Reserve's goals, which gives the central bank impetus to begin to reduce the levels of support it has provided over the past decade.

"The market's pretty slow today, low volume again - we're still in that holiday trade mode," said Peter McIntyre, investment adviser at Craigs Investment Partners.

"There's not a lot of local news but comments from Janet Yellen were eagerly awaited - the US economy's in a very strong position, particularly with regards to employment, and she really indicated the next step for the US is higher interest rates.

"We've had higher interest rates rebounding through the interest rate market today, that's been a key theme."

Xero was the best performer, up 2.4 per cent to $18.75. Chairman Chris Liddell will step down from the board at the end of the week to take up a role in US president-elect Donald Trump's administration. US-based director Graham Smith, a former Salesforce chief financial officer, will assume the chair from the close of business today, Xero said.

Smith has been on the board for two years and chairs the audit and risk management committee. "It seems to have coped well with that news, investors have taken losing such an experienced hand at the helm relatively well," McIntyre said.

Meridian Energy rose 2.1 per cent to $2.715, after putting out its monthly operating report for December.

"Their hydro volumes really rebounded from a weaker November, they're still getting a bit of churn in the retail market but the second half of 2017 looks pretty firm for them," McIntyre said. "The new Tiwai Point contract started on January 1 this year, lake storage is good so it's all rather positive for them."

Vector rose 1.9 per cent to $3.23 while Ryman Healthcare gained 0.8 per cent to $8.47. Air New Zealand was the worst performer, down 2.7 per cent to $2.18.

"The currency's stronger and oil prices are a wee bit weaker, so it's a bit of a surprise to see Air New Zealand go back," McIntyre said. "They've declined on light volume, I think the market's still waiting for institutional investors to get back from holidays, the retail guys are back."

Z Energy fell 2.1 per cent to $7.39, and Trustpower fell 2.1 per cent to $4.70. Warehouse Group dipped 0.4 per cent to $2.75. The retailer, which is cutting costs by amalgamating its retail divisions, has hired Baycorp's New Zealand general manager Donna Cooper to run its financial services unit.