Merger mania pushes sharemarket higher

By NZPA

Thursday 10th May 2007

A record high for Fletcher Building helped boost the New Zealand sharemarket to another record high today.

The benchmark NZSX-50 index closed up 19.07 points, or 0.5%, at 4251.4, 10 points below its record high earlier.

Turnover totalled $158.4 million, with rises outnumbering falls 52 to 48.

"There's still merger mania driving the market higher," one broker told NZPA.

`The market's rife across the board with that sort of (merger and acquisition) speculation, not many stocks will be left out," he said.

Top stock Telecom rose 11c to $4.86 on the back of good-sized offshore buying.

Second-ranked Fletcher Building continued its strength, hitting a record high of $12.01 before profit-takers pushed it lower. The stock closed at $11.89, up 11c.

The company said yesterday that a $70 million tax windfall would boost its full-year result, and announced today it would not rebuild its Taupo medium density fibreboard (MDF) plant destroyed by fire despite receiving a net $81 million from insurers.

"Basically all the news has been positive for them lately," the broker said.

Sky City was up 6c at $5.00 on heavy turnover valued at $21.3 million.

Sky TV was flat at $6.05, while takeover target Canwest MediaWorks was up a cent at $2.41.

Trustpower rose 10c to $8.20 after posting a 20% rise in annual net profit.

The electricity generator and retailer had been conserving water at its hydro dams while wholesale energy prices were low.

"We think that strategy will work well for them, and it's currently delivering positive results given the escalation in prices over the last fortnight," the broker said.

Majority shareholder Infratil was down 5c at $6.20, while fellow power stock Contact Energy was down 8c at $8.73.

Tower continued to bounce back from a four-month low as several large sellers this week left the market. The fund manager and insurer rose 5c to $2.21.

Guinness Peat Group was down 3c at $2.32, Auckland Airport was down 2c at $2.70, Air New Zealand also lost 2c, to $2.82, and The Warehouse was off 4c at $6.75.

Shares in NZ Windfarms were up 19c at $2.14 after the company confirmed it would go ahead with a $75 million share issue at $1.10 each to meet future funding requirements.

Windflow Technology, the company making the turbines for NZ Windfarms' Te Rere Hau wind farm, was up 20c at $3.20.

Australia's benchmark index was up 0.1 % at 6348.2, while Japan's Nikkei average was little changed.

Earlier on Wall Street, US stocks rose after the Federal Reserve's latest policy meeting ended without any unwelcome surprises, allowing investors to refocus on the solid outlook for corporate profits.

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