Baycorp forges on as Telecom struggles

Telecom remained the black sheep in a positive sharemarket yesterday.

The local telecommunications giant hit a new 32-month low, losing 7c to 718.

Peter Stokes at JB Were & Son said Telecom faced "a number of issues" at the moment. "Also, I think brokers will recently have downgraded their forecasts for AAPT so that's starting to flow through to Telecom's profit forecast and even revisiting dividend numbers. I think all that is beginning to conspire against Telecom.

"If you take Telecom out of the equation the rest of the market was reasonably firm - most stocks were up. The only other one of the main leaders that went against the trend was Fletcher Energy." The oil and gas explorer dropped 16c to 664. "There has been some profit-taking after such a strong run ... Most brokers' valuations have been increasing and outstripping the share price increase so the discount to valuation is still very much preserved," Mr Stokes said.

High-flyer Baycorp continued to push to new heights, adding 25c to a record $12.

Mr Stokes noted Baycorp had a number of initiatives, particularly in Asia, "which could significantly add a lot of value to that stock and I think people are tapping into that story."

Because it was a stock investors tended to hold long term, liquidity was tighter. Therefore, would-be buyers were having to chase the price up.

The NZSE-40 capital index closed up 3.01 points, or 0.15 per cent, to 2048.61 on total turnover value of $117.5 million.

Rises were more than double falls at 65 to 31 among the 147 stocks traded.

Overall the market was fairly active despite the Independence Day holiday in the United States.

"It was good to see the Reserve Bank did not unsettle the markets by increasing rates," Mr Stokes said.

Australian stocks Telstra and AMP enjoyed good support. Telstra head shares improved 19c to 925 and its receipts 20c to 540, and AMP jumped 51c to $22.26.

Of the other Fletcher stocks Paper put on 1c at 246 after shareholders voted for its sale, Building rose 1c to 230, and Forests added 2c to 80.

Fisher and Paykel added 8c at 668, The Warehouse put on 15c to 530, and INL rose 9c to 409.

- NZPA