NZ stocks: Carter leads gains as Wall St fall ignored

Further gains in number two ranked stock Carter Holt Harvey and other blue chips led the sharemarket up yesterday, ignoring a weaker Wall Street which returned after a three-day weekend.

The NZSE-40 Capital Index rose 19 points or 0.9 per cent to 2123 on turnover of $61 million compared with Tuesday's $66 million.

"We're certainly seeing some good buying interest in the New Zealand market - maybe its the currency, which is still looking strong," Forsyth Barr broker Suzanne Kinnaird said.

Trading in Carter Holt was heavy as it built on gains made over the past week, adding 6c to $2.07.

Carter Holt, which confirmed on Tuesday plans to halve the staff at its Kinleith mill, had also benefited from favourable sentiment from some quarters in the investment community, ABN Amro head of sales Nigel Scott said.

"Carter Holt seems to have broken $2 and a couple of large blocks have gone through since the Credit Lyonnais conference where (chief executive) Chris Liddell presented last week."

The stock, up 10 per cent in the past week, was also seen benefiting from an improved pulp outlook, brokers said.

Air New Zealand added 6c to an eight-month high of 68c as investors applauded plans to scrap its business class, food and alcohol on domestic services.

"The stock is obviously being re-rated again, predominantly by retail flows, on the restructuring. There probably wasn't a lot in that plan that was really news for the market, but nevertheless, the share price continues to firm," JBWere broker Humphrey Sherratt said.

Kinnaird said the price rise had been overdone.

"We're hard pressed to come up with a valuation of anything near where they are trading. It depends what earnings base you take them on, but we think they're trading on a PE (price to earnings ratio) of about 20 times at the moment. Traditionally they've been a stock trading at around eight times."

Baycorp Advantage fell 41c or 9 per cent to $4.29, as competition concerns in the key Australian market continued to weigh, brokers said.

Telecom added 4c to $5.06.

Tower, which announced a 5 per cent improvement in its first-half net profit, closed up 1c at $4.78.

Brokers said the $40.7 million profit was largely in line with expectations and welcomed the company's plan to focus on the high-growth Australian wealth management sector.

Meat processing companies Richmond and Affco also reported yesterday, both posting losses.

Richmond shares closed down 33c, or 13.5 per cent, at a year low of $2.12. Affco was steady at 26c before reporting after the close of trade.

Property investor Colonial First Property Trust posted a net profit of $14.9 million for the year to March, up 15 per cent on a year ago. Its shares closed 1c firmer at $1.07.

Fisher & Paykel Healthcare gained 3c to $8.66 ahead of its annual result tomorrow.

* The New Zealand dollar continued to trade on the ailing fortunes of the US dollar yesterday, stretching to fresh 23-month highs.

By 5pm the kiwi was at US47.69c from US47.37c at Tuesday's close. Its aussie stablemate ended the local session at US56.29c (US55.76c).

- REUTER