Telecom weighs on NZ sharemarket

By NZPA

Thursday 1st February 2007

New Zealand's benchmark share index turned its back on positive sentiment around the region, falling victim instead to further selling in Telecom.

The NZSX-50 benchmark index closed down 8.78 points, or 0.2%, at 4144.20 on turnover valued at $156 million.

Top stock Telecom closed down 5c at $4.92, having been punished by investors yesterday on doubts about its planned $400 million takeover of Australia's PowerTel.

"They've got the customer base and they're just linking it up with some infrastructure, which of course is what they really missed out on with their AAPT transaction," Stephen Wright of ASB Securities said.

"It's just throwing more money into Australia, I guess it just shows they can't get rid of AAPT anyway and so this a way of getting some value out of it. Short of writing it off, there's nothing much else they can do."

In addition, mobile phone rival Vodafone said today it had added 89,000 net new customers in the December quarter, eight times the number in the September quarter.

Vodafone customer numbers have grown 4.2% to 2.2 million since the September quarter.

Telecom reports its first-half result tomorrow morning.

Profit-takers moved in to some stocks, with Fletcher Building losing 7c to $11.48, Contact Energy off 2c at $8.60, Fisher & Paykel Healthcare down a cent a $4.23, and TrustPower down 10c to $8.00.

Air New Zealand shrugged off news it was among airlines being sued for $A200 ($NZ228.62) million over international freight price fixing. Air NZ shares gained a cent to $2.00.

Ryman Healthcare rose 9c to $2.36 in the wake of its share split, Guinness Peat Group was up 4c at $2.58, Michael Hill rose 5c to $7.65, and Sky City was up 2c at $5.40.

Australasian finance companies performed well today, with Westpac up 68c at $28.65, ANZ up 33c at $33.05, and Tower up 2c at $2.40.

In Australia, the benchmark index was up 0.7%, or 39 points, to 5812.4. Japan's Nikkei average rose 0.6% as Sony gained on a brokerage upgrade, and insulator manufacturer NGK Insulators surged 16% after raising its profit forecast.

Earlier on Wall Street, US stocks climbed after the Federal Reserve left rates steady and flagged no new concerns about inflation that would have merited higher borrowing costs.

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