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NZ shares surge to record high, Fletcher Building up 3%

By NZPA

Thursday 23rd November 2006

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The New Zealand share market soared to a fresh record high today on the back of a 3% rise in blue chip Fletcher Building.

After a slow start, the NZX-50 index ended 39.4 points higher, up 1%, at 3857.00, on turnover valued at $100.1 million.

Number two stock Fletcher Building outpaced the main index, rising 29c to $9.89, short of its record high of $10.20 last week. The building supplies and construction stock has been a solid performer on strong business fundamentals, and its leading position to build either of the Rugby World Cup stadium options in Auckland.

"No-one has been wanting to sell it and the stock bounced," said UBS head of research Richard Leggat, noting the move had more to do with buyers keen to get what little stock is around than the stadium decision deadline tomorrow.

"I wouldn't be surprised if it doesn't hold these gains in the short term, because I think it's probably a bit overdone on the day," he said.

Top stock Telecom rose 2%, or 9c, to $4.57.

Among other top-10 stocks, Auckland Airport rose 3c to $2.14, Sky City was up 4c at $5.04, Contact Energy was flat at $7.90, and Fisher & Paykel Healthcare rose 3c to $4.45.

"Fisher & Paykel Healthcare had a briefing day on new products, and that's had a good day given it was ex-dividend (5.4cps) today," Leggat said.

NZ Refining fell 10c to $6.55 on news its margins were significantly lower in September and October than during the first part of the year, and were expected to remain lower in November and December.

Tower, which has separated its trans-Tasman businesses and listed its Australian unit on the ASX, rose 2c to $2.12. It has traded a wide range since the separate listing process began on November 14, between $1.29 and $2.65.

"Tower's interesting because I think the market's still confused as to what is fair value, but that has come off its lows and has had a reasonable day," Leggat said.

Air NZ, which jumped 5% yesterday after Qantas confirmed it had received a takeover approach from a consortium, was flat at $1.55.

Mainfreight, up 62c to $7.80 after yesterday reporting a 43% rise in first-half profit and a special 28cps dividend, gained a further 20c to $8.00. Fellow transport operator, Freightways, was up 6c at $4.30.

Chemicals maker Nuplex rose 23c, or 3.2%, to $7.33, having touched a record high $7.34 earlier in the session. Retailer The Warehouse was 7c higher at $6.90 ahead of its annual meeting tomorrow.

Australian shares rose 0.2% although Qantas backed away from yesterday's high, while in Japan markets were closed for a holiday.

Earlier on Wall Street, US technology stocks climbed, helped by a strong earnings report from personal computer-maker Dell, but the Dow closed just slightly higher as financier Kirk Kerkorian cut his stake in General Motors Corp.

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