NZ sharemarket pushed lower by soft Telecom

By NZPA

Thursday 4th January 2007

The New Zealand share market continued its retreat from record highs despite a strong showing from a handful of blue chip stocks.

The benchmark NZX-50 closed down 20.54 points, or 0.5 percent, at 4028.96, having hit a record close of 4055.47 on Friday. Turnover totalled $67.2 million.

"It's generally soft, volumes are still pretty light," said Richard Leggat of UBS.

Top stock Telecom fell 11c or 2.25% to $4.77, number two stock Fletcher Building rose 2c to $10.90, and Contact Energy was up 2c at $8.25. Contact was up earlier at a record high of $8.40 after news of a potential merger between majority owner Origin Energy and AGL.

"Contact's doing quite nicely on the back of people wondering if an Origin/AGL tie-up will lead to a bid for Contact. It's understandable to see that share price move up," Leggat said.

"Telecom's fallen into a hole, I don't think there's any particular news and at this time of year if there is flow one way or another you can see share prices move a bit."

Fisher &Paykel Healthcare fell 7c to $4.26, while F&P Appliances was flat at $3.84.

"The New Zealand dollar remains pretty firm, Fisher & Paykel Healthcare -- despite having virtually all its revenue in US dollars or euros, being an exporter -- has been resilient but it's off a bit today. I think it's been somewhat surprising that it hasn't pulled back earlier than this," Leggat said.

Air New Zealand was up 3c at a nearly two-and-a-half year high of $1.92 on the back of lower oil prices, while The Warehouse, seen as a likely takeover target, was down 4c at $7.21.

Ebos was up 30c at a record $6.00, and Ryman rose 10c to $10.90, having hit a record high earlier of $11.06, ahead of a five-for-one stock split.

Infratil was down a cent at $5.43 and TrustPower was flat at $7.75 after being the major feature of the market yesterday.

Infratil announced it had completed buying the NZ assets of US company Alliant Energy -- a 24% stake in TrustPower, plus a 5.1% stake in Infratil -- for $432.7 million.

At the same time it was selling more than 26 million TrustPower shares and 13.5 million Infratil shares.

Australian shares were down 0.9% at 5597.9. In Tokyo, the Nikkei average rose 0.7% to an eight-month closing high, with Toyota Motor Corp gaining on news that it became one of the Big Three automakers in 2006.

Earlier on Wall Street, the Dow and the Nasdaq ended modestly higher, while the S&P 500 dipped as a sharp sell-off in energy shares and worries about economic growth eclipsed Wal-Mart's upbeat sales forecast and a jump in Home Depot after its chief executive quit.

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