NZ stocks: Big deals fail to lift index

Several long-awaited deals came to fruition yesterday, yet the sharemarket in general remained reasonably unflappable.

Corporate news included Fletcher Challenge company Rubicon's debut, reports SingTel has secured a deal to buy Cable & Wireless ahead of Telecom New Zealand, and Carter Holt Harvey's agreement to buy the Tasman pulp mill at Kawerau for $311 million.

The NZSE-40 capital index ended the day down 13.90 points, or 0.68 per cent, at 2044.80, while the small companies' NZSE-SCI capital index closed down 24.99 points at 4981.87.

Turnover of 336.14 million, valued at $151.27 million, was topped by Fletcher Forests preference shares with $67.11 million-worth trading hands - much of which was a technical deal related to Rubicon's sub-underwriting of the Forests rights issue last year.

Credit Suisse First Boston dealer David Price said the market was quiet, despite the big news.

Rubicon, led by chief executive Luke Moriarty, ended its first day of trading on the local bourse at 44c - just shy of the 49c valuation put on it by brokers, but well below a prospectus net asset backing of 88c a share.

Mr Price said the stock was cheap and he expected it to rise in coming weeks.

"There was certainly a range of values - people have been getting a bit carried away on the discounts they have applied to the stock. There are a lot of assumptions to be made."

Although billed as a vehicle for commercialising emerging technologies, Rubicon has also been lumped with a rag-bag of assets, including its 17 per cent stake in Forests and the Challenge petrol chain.

Rubicon has sold half of its Capstone Turbine holding in the US, or 582,000 shares. Capstone closed on Friday at $US29.15.

Mr Price said CHH's decision to buy the Tasman mill was no surprise and the price offered was viewed as reasonable by the market. Carter Holt nevertheless ended the day down 3c at $1.88.

"Basically stocks are moving back to more normalised levels after Friday's rebalancing," Mr Price said.

Telecom closed down 4c at $5.68 after cash-rich Singapore Telecom agreed to buy C&W Optus for $A17.2 billion ($NZ20.8 billion). Despite the share price movement, the outcome was viewed positively by Telecom investors.

Fletcher Building ended its first day trading as a standalone company down 5c at $2.20.

Auckland Airport was down 12c at $3.52 after shedding a 5c dividend, while Montana was down 9c at $4.08 after going ex-dividend to the tune of 5c.

DB Group shed 20c to $5.20, and The Warehouse was down 10c at $6.10. Sanford was up 10c to $6.15, Sky City rose 10c to $9.30, Telstra gained 18c to $7.88 and UnitedNetworks was up 4c at $8.75.

- NZPA