NZ stocks: Slight move upwards after holiday weekend

12.00pm

Shares on the New Zealand stockmarket made a tentative move upward this morning, reopening to quiet trade after a long weekend.

By 11.30am, the NZSX-50 gross index was 3 points or 0.13 per cent higher at 2294.50, while the NZSX-40 capital index was down one point or 0.05 per cent at 2187.62. Turnover was $20.49 million.

Overseas markets set a positive example yesterday. On Wall St, stocks rose in active volume as two multi-billion-dollar acquisitions encouraged investors to buy stocks in a vote of confidence about future business conditions, while reports on the housing sector bolstered expectations of an economic rebound.

The return of large-scale mergers, rarely seen since the late 1990s stock boom, sends a signal to the market that corporations have confidence in business fundamentals and are comfortable with the prices of stocks.

The Dow Jones industrial average was up 44.00 points to 9626.46. The broader Standard & Poor's 500 Index was up 4.29 points to 1033.20.

In London, a rally by global news and information firm Reuters led a modest gain in the UK top share index on Monday as confidence that earnings will continue to improve picked up after last week's sell-off.

The FTSE 100 benchmark index closed up 12.3 points, or 0.3 per cent, at 4251.3, below an earlier high at 4267.0.

Elsewhere, Germany's DAX 30 shot up 1.70 per cent to 3517.1 points, and Japan's benchmark Nikkei average ended up 1.15 per cent at 10454.12, after logging a 6.36 per cent drop last week.

But Forsyth Barr Frater Williams broker Brian Stewart said the local market was paying scant regard to the example set by offshore markets.

"There was a bit of pre-market crossings, but it's not that busy, it's like a Monday morning -- quiet," he said.

Shares in ANZ Banking Group began trading again on the local market this morning and will also resume trading across the Tasman.

By 11.30am ANZ shares were 10c lower at 2115 on the NZX board.

On Friday, the stock was placed in a trading halt in advance of the bank's announcement it was to buy the National Bank of New Zealand from Britain's Lloyds TSB in a $6.27 billion deal.

ANZ plans a A$3.6 billion ($4.19 billion) rights issue to fund the purchase and the price of the new shares -- A$13.00 -- is well below the A$18.30 dollars at which ANZ shares last traded.

ANZ said it would consider seeking a NZ stock exchange listing of the combined group and a public offer of shares, but not before 2006.

Mr Stewart said the price paid by ANZ for the National Bank "appears to be a realistic one" but questions remained whether or not the bank would benefit from the synergies created by the acquisition.

Meanwhile, Mr Stewart said ANZ's share price would not find its real level until the Australian market opened.

In early trade, market leader Telecom was up a cent to 492 by 11.30am. Contact Energy was also up a cent at 498.

Fisher & Paykel Healthcare was a big mover in early trade, quickly losing 12c to 1180.

"Over the past two or three days they've been a bit weaker, maybe on the back of the currency," Mr Stewart said.

Independent Newspapers Ltd, which is currently making a play for Sky TV shares it does not already own, rose 2c to 462.

On Friday Telecom announced it had sold its share in Sky TV to INL, but Sky TV's independent directors said the INL offer was light.

"There should be no impact from those announcements," Mr Stewart said, as both were old news.

"It's more just the flow on the market today.

"We have a valuation on Sky of over 510. We quite like the cash flow story from here and they've been through the pain of setting up the company, and getting to critical mass, so the cash flow starts to be generated from this year on. Obviously INL is taking the opportunity to secure that cash flow".

By 11.30am Sky TV was down a cent at 495.

Stocks to rise by 11.30am included: Auckland International Airport up 5c to 650, BayCorp Advantage up 10c to 304 , Infratil up 2c to 238, Northport up 5c to 315 , Nuplex up 8c to 415, Promina up 5c to 380, Ryman Healthcare up 4c to 206, and Trustpower up 10c to 540.

Among stocks to fall were: AMP down 6c to 740, Cavalier Corp down 4c to 550, Ebos down 5c to 335, Fletcher Challenge Forests down 2c to 129, Fisher & Paykel Appliances down 10c to 1465, Fletcher Building down 10c to 432, Genesis Energy down 9c to 108, Ports of Auckland down 5c to 840, Telstra down 3c to 544, and The Warehouse down 4c to 570.

There were 30 rises and 32 falls among 103 stocks traded by 11.30am

- NZPA