NZ shares boosted to new high ahead of results season

By NZPA

Thursday 18th January 2007

Takeover targets The Warehouse and Contact Energy helped boost the sharemarket to a fresh high, while the looming results season also kept investors interested.

The NZX-50 index closed up 23.00 points, or 0.6%, at 4096.34, on turnover valued at $125.9 million.

"Some good demand from some of the blue chip stocks, in particular Contact Energy," said Grant Williamson of Hamilton Hindin Greene.

"Buyers are in there just looking to see if there'll be any corporate activity following the major shareholder Origin merger talks in Australia."

Contact has leapfrogged Fletcher Building to second place by market capitalisation, closing up 8c at $8.70. It earlier touched a record $8.76.

Fletcher Building closed 1c higher at $10.55, while top stock Telecom was up 6c at $4.99.

"Telecom's recovered from the hiccup a couple of days ago when there was the talk of the Kiwi share, but the market's just settled down. The overriding factor here remains the directory sale, and investors are positioning themselves ahead of that," Williamson said.

The Warehouse soared 22c to $7.26 after 10% owner, Woolworths, applied for regulatory clearance to make a full takeover. That follows fellow shareholder Foodstuff's application, and the planned, but aborted, bid by founder Stephen Tindall last year.

"I think investors are still a wee bit uncertain about what might actually happen here, with two parties holding blocking stakes in the company and of course Tindall involved as well," Williamson said.

"But they obviously feel that someone's got to give at some stage and are going to have to pay a pretty hefty price in order to get rid of the other party involved."

Sky Television was up 13c at $6.33, and casino company Sky City also rose 13c, to $5.18.

"Sky City, which has shown a bit of weakness in recent times, has picked up very nicely today. One large buyer in particular in the marketplace, so someone may be accumulating ahead of their result next month."

Infratil rose 10c to a new record high of $5.70, Nuplex was up 10c at $7.35, and Port of Tauranga gained 3c to $6.20.

Goodman Fielder, seeking approval to buy a Huntly-based baker, fell 2c to to $2.62, and Ryman Healthcare fell 9c to $10.52.

Investors were positioning themselves ahead of the financial reporting season, which gets into full swing next month.

"I think it will be very mixed," he said.

"I think some stocks, particularly the domestic-based (ones), are probably still going to perform quite well, but I think the strong dollar might just have affected these exporters and companies that receive earnings from overseas, more than the market expects."

Australia's benchmark index rose 19.4 points, or 0.3%, to 5665.5, Japan's Nikkei average rose to a nine-month high on hopes of consolidation in the drug industry.

Earlier on Wall Street, US stocks ended lower, led by losses in technology shares after disappointing results from bellwether Intel and a brokerage downgrade of Cisco Systems.

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