MARKET CLOSE: Sharemarket rises strongly, Telecom up 3%

Wednesday 11th May 2011

A 3.12% rise in the share price of Telecom helped propel the New Zealand sharemarket higher on a day other markets posted gains.

There was also a corporate play to provide interest with DNZ Property Fund revealing it has approached Argosy Property Trust with a "merger" plan under which DNZ Property will manage the combined assets.

The benchmark NZX-50 index closed up 30.126 points, or 0.854% at 3558.871, which is its highest level since the middle of 2008.

Telecom (NZX: TEL ) rose 7c to $2.31 and brokers said the more than 16 million shares traded was good volume for the stock.

"Telecom has had a good day," said Ross Cuthbert at Craigs Investment Partners.

"There is possibly a bit more certainty for investors after their announcement last week that capital expenditure will be lower," he said.

Argosy Property (NZX: ARG ) closed up 2c at 82 and traded as high as 83 after saying the approach from DNZ Property was oral and it would consider any written information that was provided.

DNZ Property (NZX: DNZ ) is intending pay shares to Argosy unitholders and remain as a listed property investor managing both portfolios. DNZ Property rose a cent to $1.35.

"Maybe DNZ sees an opportunity there with the cost of the internalisation of Argosy's management contract raising a few eyebrows," Cuthbert said.

"So far Argosy is rebuffing them," he said.

Fletcher Building (NZX: FBU ) rose 7c to $9.05 and Contact Energy (NZX: CEN ) rose 4c to $6.04. SkyCity (NZX: SKC ) rose 4c to $3.75 and Sanford (NZX: SAN ) rose 7c to $5.60.

Pharmacybrands (NZX: PHB ) rose 3c to 53 after saying it was buying medical centre assets from Radius Health Group.

Ryman Healthcare (NZX: RYM ) gained 2c to $2.61, Ebos (NZX: EBO ) eased 2c to $7.33 and Abano Healthcare (NZX: ABA ) rose 5c to $4.55.

Cavalier Carpets (NZX: CAV ) fell 5c to $3.50 and Pumpkin Patch (NZX: PPL ) fell a cent to $1.20. Steel & Tube (NZX: STU ) eased 3c to $2.65.

In the US, a rise in stocks was led by utilities and other defensive sectors that may drive further gains.

For now the equity market is filtering out potential problems involving euro-zone debt and speculation that the recent sell-off in commodities is a harbinger of weak economic growth.

Helping to support the market was news of a trade surplus in China, which eased fears about slow global growth.

The Dow Jones industrial average was up 0.6% at 12,760.36, the Standard & Poor's 500 Index was up 0.8% at 1357.16, and the Nasdaq Composite Index was up 1% at 2871.89.

NZPA

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