Market Close: NZX rises as earnings season rolls on

NZPA

Friday 11th February 2011

The New Zealand sharemarket edged ahead today and there was plenty for investors to digest with Telecom reporting earnings and Sir Ron Brierley's Guinness Peat Group (GPG) signalling its break up.

The benchmark NZX-50 index closed up 1.574 points, or 0.047%, at 3367.442. Turnover was worth $126 million. There were 41 rises and 37 falls among the 112 stocks traded.

Telecom (NZX: TEL ) was among the losers, falling 3c to $2.16 after tax and regulatory changes knocked its half year bottom line, with net profit falling 32.2% to $164m.

"The Telecom story is still all about ultrafast broadband and until we get that resolved what they earn is irrelevant," said James Lee, head of institutional equities at First NZ Capital.

He said investors were awaiting a decision from the Government on the ultrafast broadband network.

"It is impossible to value Telecom without knowledge of the future business and we don't know that the future business will look like," Lee said.

GPG (NZX: GPG ) closed up 7c at 77 on heavy volume after saying it will get a new senior manager in to oversee the sale of its assets and will return money to shareholders. Turnover in the stock amounted to $33.18m.

Lee said a new board was in control and it had set up a plan to wind up the business but there was no time frame.

He was surprised at the movement in the share price because the plan was confirmation of what the company had been signalling for a while. Tower (NZX: TWR ) rose 5c to $1.99 and Turners & Growers was untraded. GPG is an investor in both companies.

Fletcher Building (NZX: FBU ) rose 5c to $8.16 after saying it had ACCC approval for its bid to buy Crane.

Otherwise, Methven (NZX: MVN ) rose 6c to $1.70, Steel & Tube (NZX: STU ) rose 5c to $2.44, Restaurant Brands (NZX: RBD ) increased 5c to $2.45, Sanford (NZX: SAN ) was up 10c to $5.05 and Cavalier (NZX: CAV ) rose 5c to $3.20.

NZ Refining (NZX: NZR ) lifted 18c to an 18-month high at $5.18 but ended at $5.05.

Contact Energy (NZX: CEN ) fell 2c to $6.23, Infratil (NZX: IFT ) was down 1c to $1.92 and TrustPower (NZX: TPW ) declined 1c to $7.20.

Auckland Airport (NZX: AIA ) fell 1c to $2.22 and Freightways (NZX: FRE ) dropped 2c to $3.20.

Profit-taking continued in Mainfreight (NZX: MFT ), which fell 5c to $8.15. Abano Healthcare (NZX: ABN ) was down 10c to $4.75.

In the US, stocks finished the day mixed, dragged down by Cisco Systems and Akamai Technologies, which both issued weak earnings forecasts, raising concerns about business spending.

Cisco, the world's largest networking equipment maker, fell 14 percent, the most of the 30 stocks that make up the Dow Jones average. The company's fourth-quarter income slid 18 percent because of lower sales to government agencies.

The Dow Jones industrial average ended an eight-day winning streak, losing 0.1 percent to close at 12,229.29, while the Standard & Poor's 500 index rose a point to 1321.87, and the Nasdaq composite index also rose a point to 2790.45.

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