MARKET CLOSE: Fonterra Fund produces historic stag - up 26%

By Paul McBeth

Nov. 30 (BusinessDesk) - The historic listing of Fonterra units on the NZX caused mammoth volumes by New Zealand market standards and the biggest listing day stag that investors have seen for years.

The non-voting units, which launched at midday today, surged as high as $6.95, a 26 percent stag before closing at $6.85 from an offer price of $5.50. The fund's turnover was $179.8 million as investors scrambled to get a slice of dairy exporter Fonterra Cooperative Group's dividend stream.

Turnover in the NZX50 was lower, but substantial, at $175.2 million.

The most comparable float was the December 2011 listing of TradeMe, which rose 6.9 percent on its first day, and was up about 10 percent on its issue price by the end of its first week's trading, said Andrew Bascand, at Harbour Asset Management.

The fund attracted more trading than the rest of the NZX50 put together and is likely to have been attractive to foreign investors, who took 42 percent of the initial issue of units after Tuesday's book-build.

"Before that, you would have to back a long way" for a bigger stag, said Bascand.

At month's end, New Zealand shares rose 2.3 percent in November.

On the day, the NZX 50 index rose 33.31 points, or 0.8 percent, to 4050.08. Within the index 32 stocks gained, eight declined and 10 were unchanged. Turnover was $175.2 million.

"The excitement today has been around the Fonterra Shareholders' Fund - that's been a stunning debut," said Shane Solly, head of equities at Mint Asset Management. "It's the first time you've really been able to get access to the dairy industry, and is quite unique."

Xero led gainers on the top 50 index, climbing 6.8 percent to $6.88 after US investors Valar Ventures and Matrix Capital Management forked over $82 million to build their respective stakes in the local cloud accounting software provider, with $60 million of that fresh capital.

"The American investors appear to have a background in this type of tech sector - they're quite well-regarded and it's good growth capital," Solly said.

Fletcher Building, the biggest listed company on the exchange, rose 1.4 percent to $7.92 after government figures showed building consents were 32 percent higher in October than the same month a year earlier.

Solly said New Zealand's market has outperformed on the month, with recent capital returns by pay-TV operator Sky Network Television and insurer Tower giving heart to investors. Sky shares rose 1 percent to $5.27 and Tower fell 1 percent to $1.93.

Heartland New Zealand climbed 2.9 percent to 70 cents after the lender with aspirations to be a bank flagged flat annual profit for 2013 and announced a special dividend of 1.5 cents per share.

Infrastructure investor Infratil rose 2.9 percent to $2.325, specialty resins maker Nuplex Industries advanced 2.8 percent to $2.96, and transport logistics firm Mainfreight rose 2.3 percent to $11.20.

Warehouse was the biggest decliner, falling 3.2 percent to $3.05, while Telecom shed 1.7 percent to $2.31 and Air New Zealand dropped 1.2 percent to $1.28.

Vector declined 0.8 percent to $2.62 after the Commerce Commission set its default price-quality path pricing for 16 electricity distributers, and said the Auckland monopoly lines company was wrong in its comparisons with Australian peers.

(BusinessDesk)

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