New Zealand shares fell for a third day, paced by Xero as investors turned away from the high growth stock after an analyst revised their forecasted subscription rate for the company. Outside the benchmark index Synlait Milk fell on weaker global dairy prices.
The NZX50 Index fell 6.211, or 0.1 percent, to 5116.308. Within the index there was an even split as 20 stocks fell, 20 rose and 10 were unchanged. Turnover was $162.2 million.
Xero fell 2.9 percent to $38 and has an average recommendation of 'sell' according to 3 analysts surveyed by Reuters. The cloud-based accounting software is the second largest listed company in the stock market, and has climbed 236 percent in the past year, however, in the last month the stock has declined 8.4 percent, underperforming the NZX50's 2 percent gain.
"It is very early days in Xero's ramp up, so you're trying to read signals today for what may be much bigger numbers in the future, but it just looks as though they're going to be a little shy of what some of the more bullish people had hoped for," said Matthew Goodson who helps manage $650 million in equities at Salt Fund Management. "Xero certainly went vertical last year, as did many similar stocks in America and they have given up ground in recent days, as has Xero."
"There's been a slight shift away from the higher growth end in the market if you like," particularly from bio-tech and internet companies, said Goodson.
