NZ sharemarket retreats slightly, Telecom unchanged

By NZPA

Thursday 25th January 2007

The New Zealand sharemarket eased a few points today, despite starting in positive territory after the Reserve Bank's decision to leave official interest rates unchanged.

The benchmark NZX-50 index closed down 2.63 points at 4135.56, having touched a lifetime high earlier in the session of 4146.812. Volume totalled $96 million.

"People are positioning unders and overs ahead of the results," said Nigel Scott of ABN Amro Craigs, noting that a series of short weeks were looming for the market and there were no strong themes.

Record high levels for the Australian market and corporate action were also influencing the New Zealand market.

Today, Independent News & Media said it was launching a buyout of Australasian media giant and NZ Herald publisher APN.

Also today, Powertel said it had received confidential approaches, after reports Telecom may be considering merging its Australian business AAPT with the Sydney-based telco.

Telecom closed unchanged at $5.12 on $27m worth of shares traded, while APN was untraded, but closed on Tuesday at $6.90.

Fletcher Building closed up 21c at $11.18 after the Reserve Bank rate call, although the central bank warned of future rate rises if strong domestic demand continued. The stock had earlier touched a record high $11.30, and has risen 7% so far this week.

"That's a pretty substantial rally over the last week or so for Fletcher Building, I think there's a little bit of positioning ahead of results," Scott said.

Blue chips were generally off-colour. Fisher & Paykel Appliances fell 9c to $3.67, F&P Healthcare was down 4c at $4.26, Auckland Airport lost 2c to $2.23, and Contact Energy was 3c lower at $8.42.

On the upside, Freightways rose 7c to $4.80, below its earlier lifetime high of $4.95. Tower gained 6c to $2.30, takeover target The Warehouse was up 8c at $7.26, and Hellaby Holdings recovered 6c to $4.23.

TrustPower rose 10c to $7.90 after a significant rise in nine-month profit. Controlling shareholder Infratil was down 4c at $5.60.

Property-related stocks were positive. Property For Industry rose 5c to $1.45, AMP Office Trust was up 2c at $1.32, Macquarie Goodman rose a cent to $1.45, and Kiwi Income Property Trust was up a cent at $1.55.

Canwest Mediaworks fell 2c to $2.33, Nuplex shed 12c to $7.17, and Ryman Healthcare was down 5c at $10.90.

Hallenstein Glasson, which late in the day improved its profit guidance but said it would still be down 10%, closed up a cent at $5.12.

The strong currency was a key factor for many companies, and many investors were wondering how long that would last, Scott said.

Australian stocks were up 0.2% but below an earlier record high. Japan's Nikkei share average hit a more than six-year high as technology firms such as Sony gained on hopes of higher profit forecasts.

Earlier on Wall Street, the Dow closed at a lifetime high amid optimism about technology earnings.

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