MARKET CLOSE:NZ shares gain on blue-chip appeal as ikeGPS debut fizzles
By Suze Metherell
July 23 (BusinessDesk) - New Zealand shares gained, led by blue-chip stocks such as Sky Network Television, after the
latest high-tech initial public offer fizzled with shares of ikeGPS sinking below its sale price.
The NZX 50 Index rose 12.664 points, or 0.2 percent, to 5146.53. Within the index, 17 stocks rose, 24 fell and nine were
unchanged. Turnover was $112.2 million.
The local bourse is experiencing a flurry of listings, many of which are tech companies and spoiling investors for
choice as they mull the high valuations of already listed growth stocks ahead of next month's earnings season. Today's
listing of ikeGPS struggled, with the shares sinking 10 percent to 99 cents, below its initial public offer price of
$1.10. The portable measuring device raised $25 million in new capital to chase growth and expand sales in its US
market.
"The market is not paying for blue sky at the moment," said Paul Harrison, who helps manage $650 million of equities and
property holding for Salt Funds Management. "There's been a change in sentiment around high-growth stocks that we've
seen globally. People that invest in momentum are exiting these kinds of stocks, and you're seeing some of the other
ones, like Serko, GeoOp and SLI pulling back."
Gentrack Group, the airport and utility software company which listed last month, rose 0.8 percent to $2.54, while
Serko, the travel booking software business, fell 4.4 percent to 88 cents, below its $1.10 offer price. SLI Systems, the
search engine developer which listed last year, slipped 0.7 percent to $1.39, and has more than halved its value since
it January record of $2.85. NZAX-listed GeoOp, the task managing app maker, dropped 8.9 percent to 82 cents, below its
$2.40 debut in October last year.
Blue chip stocks paced gains on the benchmark index, led by pay-TV operator Sky TV, which climbed 2.3 percent to $6.81.
Telecom Corp rose 1.9 percent to $2.90. Fletcher Building, New Zealand's largest listed company, advanced 1.5 percent to
$9.07.
"Sky TV, Fletcher and Telecom attract the global investor, and are performing quite well," Salt Funds' Harrison said.
Xero, the cloud-based accounting company, fell 1.7 percent to $23.50. At its annual general meeting in Wellington today
the company said customer numbers rose to 334,000 as it looks to reach 1 million customers and foregoes profit as it
chases growth.
"Those customer numbers look a little disappointing, and I think people might be disappointed they didn't get more
information on the US as well," Harrison said.
Shares of Dunedin-based biotech company Pacific Edge were unchanged at 66 cents.
Units in Fonterra Shareholders' Fund fell 0.5 percent to $5.96. Fonterra Cooperative Group, the world's biggest dairy
exporter, said it will scale back operations at its Waikato Canpac packing facility to five-days-a-week from its current
seven days, and may cut 110 of the 330 staff employed at the site, after volumes at the plant were reduced. The units
give holders access to Fonterra's dividend stream.
(BusinessDesk)