Market, Telecom lose early gains

By NZPA

Thursday 28th June 2007

The sharemarket retreated into negative territory again, as Telecom gave up its early 2% gain on news its new chief executive is Paul Reynolds.

The NZSX-50 lost 13.61 points, or 0.3%, to 4189.66, its sixth consecutive fall. Turnover totalled $160.1 million.

"Domestic factors are still weighing on this market, probably more so than what's happening offshore -- even though the New Zealand dollar did lose a bit of ground against the US overnight, we're still very strong against other currencies," Hamilton Hindin Greene partner Grant Williamson said.

Telecom closed up 2c at $4.48, 7c below its session high after its announcement it was hiring the 50-year-old chief executive of British Telecom's wholesale division.

Fund managers said the appointment of Dr Reynolds had been well signalled and was not a surprise. They said he would be strong in dealing with the regulatory environment that was dictating the company's performance.

"It will bring a bit of certainty back to the stock, although the market will be waiting to see what his first action will be as the new head of Telecom. I think the market will take heart that there's a bit of fresh blood coming in there," Williamson said.

Second-ranked Fletcher Building fell 13c to $12.30, retreating further from last month's record high. Contact Energy was down 9c at $8.96, Auckland Airport rose 2c to $3.20, and Sky City fell 7c to $5.01, unable to hold onto gains after news managing director Evan Davies is departing.

Fisher & Paykel Appliances, which has a large export market in Australia, closed down 9c at $3.52, while F&P Healthcare gained 3c to $3.29.

Air New Zealand fell further following Qantas' sale of its remaining 4.2% stake at $2.70 per share, losing 7c to $2.58.

"I think the market's just a bit disappointed at that placement price," Williamson said.

Among the few top-50 gainers, The Warehouse was up 5c at $6.03, NZ Refining rose 4c to $7.33, Freightways was up a cent at $3.96, and NZX was up 15c at $11.50 after the Securities Commission gave the market operator the tick, along with some recommendations.

Steel & Tube fell 17c to $4.50, Infratil was down 2c at $3.16, TrustPower lost 5c to $8.45, and Port of Tauranga was off 5c at $7.10.

Among dual-listed stocks, ANZ fell 13c to $31.80, Westpac was down 9c at $27.91, Lion Nathan was flat at $10.02, and AMP fell 5c to $11.06.

There were 71 falls and 41 rises.

Australia's benchmark index was up 1.2% at 6257, while Japan's Nikkei average rose 0.5%.

Earlier in the US, stocks rose as investors snapped up beaten-down shares after a three-day slide and a nearly 2% jump in oil prices boosted demand for energy companies.

Comments from our readers

No comments yet