Shares up as Xero reaches record

A Fletcher Building affiliate in India has agreed to buy a laminates manufacturing business in that country. Photo / Dean Purcell

Market buoyed by Australian interest in cloud-based company, and an acquisition by Fletcher Building.

New Zealand shares rose yesterday, nudging the NZX 50 Index back towards the five-year high charted last month, as Australian interest drove Xero to a record and Fletcher Building gained after agreeing to buy a laminated panels business in India.

The NZX 50 rose 26.07 points, or 0.7 per cent, to 3983.99. Within the index, 24 stocks rose, 13 fell and 13 were unchanged. Turnover was $78.7 million.

Xero, the cloud-based accounting services company that dual listed on the ASX last week, rose 8.6 per cent to $6.30.

That is even before the fast-growth company, which listed on the NZX in June 2007, has turned a profit. It has gained 110 per cent this year.

Listing on the ASX "opens up more buying in the stock - that's what we've seen," said Grant Williamson, a director at Hamilton Hindin Greene.

Fletcher Building, the biggest construction and building products company on the NZX 50, rose 3.3 per cent to $7.48 after its local affiliate, Formica Laminates (India) Private, agreed to buy the laminates manufacturing business of listed Indian manufacturer Well Pack Papers & Containers in the Indian state of Gujarat, for 365 million rupees ($8.1 million).

"It highlights the potential of the Indian market for that division of Fletcher," Williamson said.

Contact Energy, the biggest power company on the NZX , fell 2.6 per cent to $5.21 after its controlling shareholder, Australia's Origin Energy, warned last week that regulatory and pricing decisions would cut underlying profit by as much as 10 per cent this year.

Among smaller stocks, Genesis Research and Development was halted from trading at 1.8c and told the ASX it might not have enough funds to keep operating without a loan or more support from shareholders.

Telecom, the biggest phone company on the NZX 50, rose 1 per cent to $2.435, and Chorus, the network company spun off from Telecom last year, rose 0.9 per cent to $3.27. Chorus has gained 3.9 per cent this year.

Australia & New Zealand Banking Group fell 1.8 per cent to $31.34 after shedding its 79c-a-share final dividend.

Westpac Banking Corp, the other Australian bank that trades on the NZX, rose about 1 per cent to $33.40.

Retailer Warehouse Group rose 0.3 per cent to $3.19 and Fisher & Paykel Healthcare climbed 1.2 per cent to $2.46.