NZ sharemarket sets new record, Telecom at 8-month high

By NZPA

Monday 15th January 2007

The New Zealand sharemarket built on a positive start today, boosted by further speculation about Telecom's sale of its directories business.

The benchmark NZX-50 index rose 33.77 points, or 0.8%, to a record high 4085.61. Volume remained muted, valued at $64.5 million.

"There's no corporate news, but just reasonably positive sentiment albeit on low volumes," said Stephen Wright of ASB Securities.

Telecom was up 13c at an eight-month high of $5.02, after Australian media said Seven Group and Fairfax Media were among interested buyers for Telecom's Yellow Pages business, worth up to $2.2 billion.

"We've always been thinking of Telstra, but apparently some Australian media companies also are interested in it," Wright said.

A sale was expected to result in an increased payout to shareholders.

Telecom also said today it was increasing its line rental charges.

Among other leaders, Fletcher Building was up 12c at $10.68, and Contact Energy rose a cent to $8.56, below last week's record high $8.64.

Companies that are dual-listed in Australia benefited from a fall in the New Zealand dollar against its Australian counterpart, at the same time the Australian market rose.

"It just means that in New Zealand dollar terms the prices will be a bit better," Wright said.

Promina was up 17c at $7.98, AMP rose 20c to $11.60, and Fisher & Paykel Healthcare, with a big exposure to Australia, rose 3c to $4.24.

The Warehouse continued Friday's fall, down 8c to $7.00.

The retailer said it expected flat first-half net profit, and reported a Christmas period below expectations, although its best for three years.

Trustpower, which gained 5c on Friday after announcing it was setting up a $200 million windfarm in Australia, was up 20c today to $7.65.

On the slide, Tower fell 4c to $2.20, Sky TV lost 11c to $6.35, and Air New Zealand fell 3c to $2.02.

In Australia, the benchmark index was up 0.6%, while Japan's Nikkei share average gained 0.9% as engineering firms rose on news of surprisingly strong machinery orders data.

US stocks ended last week up, as energy shares rebounded with oil prices and data showing surprisingly robust December retail sales underscored optimism about economic growth.

The Dow Jones industrial average hit another record high at close on Friday, its 24th since October, while the Nasdaq posted a fresh six-year high and saw its best weekly percentage gain since mid-September.

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