NZ stocks: Commsoft, Montana hog the limelight

The New Zealand sharemarket dusted itself off a little yesterday after a slow start.

Craig and Co broker Matt Willis said the market had been more active during the past few days, partly because bargain-hunters were taking advantage of previous weaknesses.

"That has resulted in some pretty heavy turnover, especially in Telecom, though it ended down 6c. It opened at $6.20 and closed at $6.04," Mr Willis said. "Telecom may establish a trading pattern around these levels, I think there's a consensus in the industry it's too cheap," he said.

The final stage in Telecom's takeover of AAPT, the roll-out of a CDMA mobile network, and Telecom's Southern Cross cable presented an "opportunity cost" for investors in the medium term. However Telecom was unlikely to go much below $6.10, Mr Willis said.

"There's a consensus it's heading in the right direction, changing the nature of the business in a positive way and moving away from traditional lines of revenue - national and international call charges."

The NZSE-40 Capital Index was down 1.22 points at 2012.79.

After listing on Tuesday on both sides of the Tasman, Commsoft's turnover of $1.99 million yesterday saw its share price rise a sharp 25c to 170, from its listing price of 145.

"We were incredibly surprised to see that list at only a slight premium. I think their timing couldn't have been worse with the Nasdaq down, and the Olympics took some interest away. But it's still trading above industry averages as far as the multiples are concerned," Mr Willis said.

Commsoft is behind a device to monitor workers' internet usage.

The other big news was Montana's announcement that it would buy all of Corbans Wines from DB Group for $151 million in cash.

Montana - New Zealand's biggest wine company and 28 per cent owned by DB rival Lion Nathan - gained Commerce Commission approval for the takeover earlier this month.

Montana rose 20c to close at 285, and Lion Nathan gained 10c to 480.

Among the other rises were AMP, 12c to $22.20; Fletcher Building, 6c to 242; Nufarm, 5c to 380; and Telstra receipts, 29c to 415.

Renaissance was up 8c at 115 and Baycorp recovered from its 95c drop on Tuesday, gaining 7c to 1172. Frucor gained 9c to 239.

On the down side, Fletcher Energy dropped 6c to 889 and INL lost 15c to 355.

- NZPA