Shares stage dramatic comeback despite Auckland Airport slump

By NZPA

Tuesday 4th March 2008

The sharemarket's flat close today belied a dramatic turnaround after a plunge of more than 2%, led by heavy selling in Auckland Airport shares on further doubts about a Canadian takeover bid's success.

Unlike the index, Auckland Airport failed to make up all the ground lost after the Government last night tightened rules on foreign ownership of strategic assets, casting further doubt on a partial takeover bid by the Canadian Pension Plan Investment Board (CPPIB).

AIA shares closed down 24c, or 9.68%, at a year low of $2.24, having crashed to a session low of $1.99, the lowest point since September 2006.

The CPPIB said it was confident its offer of $3.60 per share for 40% of Auckland Airport would pass the tougher rules.

The NZSX-50 benchmark index closed up 0.2 points at 3584.5, recovering 80 points from its earlier low, on healthy turnover totalling $182.7 million.

Leading the charge higher was Fletcher Building, which closed up 34c, or 3.6%, at $9.79 after an earlier low of $9.40. It recovered on the back of what appeared to be portfolio buying across a number of stocks, brokers said.

"The tone, particularly towards the end given what would appear to be a buy programme in the market, definitely turned from quite weak at the outset to quite sound at the end," said First NZ Capital research manager Barry Lindsay.

Also staging a recovery was third-ranked Contact Energy, which closed up 7c at $8.05, up from a low of $7.75.

Fisher & Paykel Healthcare was up 10c at $2.80, F&P Appliances was flat at $2.60, Sky City was up 4c at $4.03, and Sky TV rose 3c to $5.05.

Top stock Telecom was down a cent at $3.91.

The Warehouse rose a cent to $6.00, TrustPower was up 26c at $7.80 after selling a further 300,000 carbon credits, Mainfreight rose 10c to $6.60, PGG Wrightson was up 10c at $2.19, and Guinness Peat Group was up 2c at $1.66.

Stock exchange operator NZX lost 30c to a 14-month low of $6.80 on light volume, after disappointing operating statistics from February including significant falls in trading volume.

Rakon lost a further 8c to a 20-month low of $2.54 on continued New Zealand dollar strength.

Air New Zealand fell 9c to $1.49, Port of Tauranga lost 5c to $6.50, Vector was down 3c at $1.83, and Tower fell 4c to $1.92.

Dual-listed stocks reflected falls across the Tasman. ANZ was down 58c at $24.22, Westpac fell 42c to $26.05, AMP fell 50c to $8.50, and Lion Nathan lost 14c to $10.86.

Australia's benchmark index was down 0.7% at 5370, having earlier been at a low of 5347. Japan's Nikkei share average was down 0.1%.

Earlier, Wall Street finished steady with the Dow and S&P closed little changed as surging commodity prices boosted shares of mining and energy companies, offsetting fears that a cash squeeze at a high-profile mortgage lender would mean more fallout from the housing slump.

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