Sharechat Logo

Xero, Diligent shares rally in anticipation of joining NZX 50

Thursday 7th June 2012

Text too small?

Shares in Xero and Diligent Board Member Services rallied today after the locally-listed tech-companies were flagged as the latest entrants to the benchmark NZX 50 index.

Xero climbed 4.2 percent to $4.27 valuing the company at $453.5 million while Diligent rose 2.6 percent to $3.50 giving it a market capitalisation of $286.7 million after the NZX yesterday said the companies met the ranking and liquidity requirements to join the index of the top 50 companies on June 18.

The tech companies will replace struggling GPS-components maker Rakon and building supplies manufacturer Steel & Tube. Shares in Rakon fell 2 percent to 48 cents, while Steel & Tube dropped 4.6 percent to $2.08.

The index shake-up comes as the stock exchange operator prepares to introduce new methodology from June 15 to the way it weights companies on the index to a 'pure free float', meaning only shares not held in a majority stake will be counted.

It will also impose tougher liquidity requirements for entry to the NZX 50, where at least 2.5 percent of a company's market capitalisation will have to change hands over a six month period.

For Xero, that means $11.3 million worth of shares will have to trade in a six-month period, while Diligent will need $7.2 million of stock to move.

About 40 percent of Xero is held by the software accounting firm's two biggest shareholders, Rod Drury with 21 percent, and MYOB-founder Craig Winkler with almost 20 percent.

Diligent's biggest shareholder is fund manager Milford Asset Management with about 9 percent.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar becalmed on US-China trade/politics nexus
Govt to pull Infrastructure Commission into Auckland port imbroglio
Wind to displace diesel for Stewart Island power
Eroad's five year target: doubling unit sales
Blinky boxes and gobbledegook: tips for choosing a cyber-security vendor
Govt support for NZME/Stuff merger difficult, not impossible, says Jarden
NZ dollar stalled; US-China trade signals remain mixed
Ryman warns NZ, Australia to take population ageing more seriously
MARKET CLOSE: NZ shares fall as US-China trade concerns weigh on markets; Ryman slips
NZ dollar stalled; US-China trade deal may be postponed

IRG See IRG research reports