NZ stocks: Advantage hardest hit in weak session

Shares ended yesterday's session weakly, following downward trends overseas. The key NZSE-40 capital index was down 15.40 points, or 0.78 per cent, at 1957.49. Turnover of 126.40 million stocks was valued at $145.91 million, with Fletcher Energy topping turnover with 8.62 million shares valued at $77.51 million.

Richard Burton of Cavill White said the key to any major rise in the sharemarket would be a stronger currency.

Stocks likely to benefit from a higher dollar and consequent increase in overseas investors were Telecom, Contact Energy, Carter Holt Harvey, INL and Sky TV.

"I think the key to the success of the New Zealand market lies in the currency, and at present the currency's about 40.68USc," said Mr Burton.

"If the currency moves through 41USc then it will move pretty quickly up to the mid-40.

"Then you may well see some offshore money. There's already some offshore money coming in to buy some cheap assets while the currency's down. If the currency hits 41c it could be a good trigger for some offshore buyers to come into the market."

Major moves yesterday were Lion Nathan, which shed 30c to $5.30, and Advantage, down 16c to $1.22.

Advantage shares have plunged from $1.54 on Friday after a move by the group's major shareholders to disband internet investment vehicle Qixel Capital.

"Advantage is a bit of a black box. It's a hard stock to understand, to analyse, so the market's a bit nervous," said Mr Burton.

"It's bought a lot of new businesses in recent times and put them together. They're all in that modern economy sector, and the valuation for those businesses has changed a lot in the last 12 months.

"The market's waiting for the Advantage AGM [tomorrow] when there will be some information released. With the stock falling back here it's probably going to fall from the top-40 index - there may well be some more selling yet to come."

Elsewhere on the market, Air NZ A shares were down 3c at $1.40 while B shares dropped 1c to $1.85, Baycorp fell 15c to $10.40, Telecom fell 4c to $5.79, and Telstra dropped 32c to $8.28.

Colonial Motors shed 10c to $2.75, Frucor fell 3c to $1.84, and Genesis was down 9c at $7.25.

Turnover of Fletcher Forest rights was heavy with 90.27 million traded, pushing the price down 0.1c to 0.1c, ahead of the December 6 closing date.

Axa gained 2c to 370 after rumours that National Australia Bank might move to buy it. Fellow insurer Tower Corp gained 3c to $4.86, while AMP was up 15c to $24.76.

- NZPA