Trading heavy on NZ sharemarket but index flat

By NZPA

Wednesday 22nd November 2006

The sharemarket ended almost flat today but trading was heavy in selected stocks.

The NZX-50 index was down just 0.09% or 3.58 points to 3817.60 on a weighty total turnover of $406 million.

ABN Amro Craigs broker Matt Willis said there had been no "macro-news driving the market one way or the other, but stock-specific news driving the performance in some places."

Two stocks particu larly in the spotlight today were Mainfreight and Port of Tauranga.

The port's shares fell a mighty 50c to $5.70 after news that shipping line Maersk had chosen Ports of Auckland as its key North Island destination, cutting Tauranga's monthly revenue by 10%.

Brokers said it remained to be seen what the implications would be for the listed port.

"If a merger [with Ports of Auckland] takes place, the decision has neutral impact for Port of Tauranga," Willis said.

Meanwhile, freight company Mainfreight touched a record $7.85, before closing at $7.80, up 62c , after reporting a 43% rise in first-half profit and a special 28cps dividend.

Analysts said the company's diversification into Australia was paying off.

"Clearly that's beaten market expectations," Willis added.

Also on an upward trend today were Telecom and Telstra, after a media report that Telstra might be interested in Telecom's Yellow Pages directories, which are on the market.

Telecom rose 3c to $4.48 on a "huge" turnover worth $250 million, while Telstra rose 7c to $4.28.

A surprise was Air NZ, up 7 cents to $1.55 after Australian counterpart Qantas confirmed it had received a takeover approach from a consortium.

"That's consistent with a number of sectors at the moment, anything that is perceived as a potential takeover target for the most part has a potential takeover premium built into the share price," Willis said.

But at least one analyst said it was unlikely the Government, which holds over 80%, would relinquish its stake.

Utilities investor Infratil rose a cent to $5.11 after news it had upped its stake in energy explorer Austral Pacific to 17.9% via a private placement at a discounted rate.

Stocks on the wane today included strong performer Ryman, down 15c to $9.70 as the market absorbed yesterday's partial selldown of a principle shareholder's stake.

Steel & Tube was down 13 to $4.75 and the Warehouse fell 8c to $6.83 on no apparent news.

Fletcher Building was flat on $9.60 after announcing it was buying local insulation specialist Forman Group.

Falls outnumbered rises by 60 to 51 on 151 stocks traded.

Across the Tasman, Australian shares rose 1.5% in mid-afternoon trading as BHP Billiton Ltd gained on firmer base metal prices and Qantas surged.

The benchmark S&P/ASX 200 is recovering from a 1.8% drop on Monday, the biggest single-day percentage drop in about three months.

Meanwhile, on Wall St, US ended slightly higher on Tuesday, as record prices for Google and Boeing were offset by rising oil prices in light pre-Thanksgiving trading.

The Dow Jones industrial average rose 5.05 points, or 0.04%, to end at 12,321.59, and the Nasdaq added 2.12 points, or 0.09%, to close at 2,454.84.

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