NZ shares follow Australia's positive lead

By NZPA

Wednesday 23rd May 2007

The sharemarket rose half a percent today, strengthening throughout the session in line with trading in Australia.

The NZSX-50 index rose 0.53%, or 22.9 points, to 4312.5 on a healthy $157 million turnover.

Fletcher Building, the biggest newsmaker of the day, was not trading as it completed a placement to partially fund its $US700 ($NZ976) million purchase of the world's biggest laminates manufacturer, Formica.

Trading in Fletcher Building was likely to resume tomorrow and the market was keenly interested in the placement price, Bryon Burke, a retail adviser for ABN Amro Craigs Equities, said.

On Monday, the market's second-largest listing hit its highest ever close of $12.90 and its market capitalisation was closing in on top stock Telecom.

Analysts said the price seemed fair. "They're definitely not paying over the odds for it," said First NZ Capital research manager Barry Lindsay.

"It's about development, additional growth for the business and geographic diversification, which is all seen to be positive."

F&P Healthcare shares rose 2.5%, or 9c, to $3.69, and analysts reportedly came out of a presentation today feeling that the result was solid except for the exchange rate.

One broker said the share price could have risen because of a fall in the kiwi dollar, boosting the outlook.

Another stock possibly affected by a softer Kiwi dollar was Telecom, which appears more attractive to offshore investors. It rose 9c to $4.88 on a hefty turnover worth $82.5 million.

Tech stock Rakon hit a new high of $5.65, before edging down to a close of $5.52, up 3c.

Port of Tauranga, which struggles with low liquidity, struck an all-time high of $6.80, up 10c. Burke said the port had surpassed the $6.20 level set during merger talks with Port of Auckland, and was well beyond the $5.60 level it slumped to after the merger looked less likely.

Casino operator SkyCity, which this week announced an aggressive cost-cutting plan, fell 5c to $5.03 on high turnover.

But brokers said it was probably due to profit-taking after a strong, two-day run.

"Brokers' reports that have come out today on SkyCity news were all pretty positive," Burke said.

Other moves included Contact, down 4c to $8.92, Vector up 6c to $2.97, the Warehouse down 13c to $6.52, Infratil down 6c to $6.60, and takeover target APN News up 31c to $6.75.

Ryman rose 9c to $2.67 after announcing an 18% rise in March year net profit yesterday.

Rises outnumbered falls 58 to 49 on 152 stocks traded.

In Australia, the sharemarket had a slow start but was heading towards positng a 0.6% rise as top banks recovered from previous day's steep falls.

Overnight, falling oil prices sparked concerns for energy stocks and the Dow Jones industrial average slipped 2.93 points, or 0.02%, to end at 13,539.95.

But an expression of interest in casino operator MGM Mirage helped drive the Nasdaq to its highest close in six years, gaining 9.23 points, or 0.36%, to close at 2,588.02.

Comments from our readers

No comments yet