NZ stocks: Air NZ takes off in flat market

The unlikely prospect of Australia's Qantas Airways buying control of Air New Zealand provided the only interest in an otherwise dull sharemarket.

The astounding-looking turnover of $472.35 million largely consisted of Telecom broker Credit Suisse First Boston reporting $410 million in shares from last week's $500 million share placement.

The remaining $62 million worth of action during the day revealed the true nature of the sharemarket, still slumbering after the United States and London were on holiday overnight.

The NZSE-40 capital index ended up 0.60 points, or 0.03 per cent, at 2052.15 and the small companies' NZSE-SCI capital index gained 46.88 points to 5322.55.

Roland Lennox-King of Forsyth Barr Frater Williams said the day's highlight was news that Qantas had been approached to consider a takeover offer for Air New Zealand.

Analysts said the proposal to allow Australia's national airline to buy control of Air New Zealand is being driven by Brierley Investments.

"I don't know how far they'll get. It sounds very unlikely unless the Government changes their thinking," Mr Lennox-King said.

The Air NZ freely held B shares gained 14c to close at $1.51 and the domestic A shares were up 9c at $1.09 on the Qantas speculation.

"The [B shares] actually started and went down. They only started to move up when the news was announced ... In the middle of the day they got a real kick-on. I think it was speculation, total speculation," Mr Lennox-King said.

The Stock Exchange also said after the market closed that Air NZ's profit warning in November did not transgress listing rules.

INL, up 8c at $3.69, did not make any moves on pay TV operator Sky Network TV despite being free to bid for 5 to 6 per cent (up to 23.5 million shares) of Sky at between $3.35 and $4 a share. Sky TV closed unchanged at $3.75.

Utilico, down 1c at 43c, said after the market closed that it would seek shareholder approval to return $14.7 million to shareholders.

Fisher and Paykel, led by chief executive Gary Paykel, was up 15c at $9.35 on continued speculation about the proposed split of its healthcare and whiteware divisions, which needs 75 per cent shareholder approval. More details are expected in June.

NZ Refining rose 29c to $16.00 despite the ongoing uncertainty about 350 million litres of diesel being recalled.

DB Group rose 5c to $5.50, Vending Technologies was up 5c at $3.15 and Wilson and Horton exchangeable notes bounced back 30c to $10.00.

- NZPA