NZ stocks: Fletcher Energy comes out of its shell

The New Zealand sharemarket rose nearly 1 per cent yesterday, boosted by news that Royal Dutch Shell was rejigging its Commerce Commission application to buy Fletcher Energy.

Shell has offered to sell more gas assets in an attempt to mollify the Commerce Commission's concerns about its $4.6 billion bid with Apache Corp of Texas to buy Fletcher Energy.

The commission's approval this week for RAL to buy the Turoa skifield at its third attempt also gave Energy shareholders some hope the deal would go through.

"If people start believing that the Commerce Commission will say yes, then you have got a lot of money that is going to be looking for a home," Richard Leggat of Merrill Lynch said.

Fletcher Energy shares ended the day up 28c at $8.45.

Bargain hunters were snooping around Fletcher Forests. The head shares were up 1c at 28c while the rights were up 0.4c to 2.5c.

The barometer NZSE-40 index rose 17.58 points, or 0.89 per cent, to 1994.33 on good volume of $135 million. Smaller stocks were flat, the NZSE-SCI capital index easing just 0.35 of a point to 5138.85.

In all, 57 stocks rose and 43 fell among the 147 traded.

Telecom continued to perform well, despite having reported a 23 per cent drop in its first-quarter profit and its first ever fall in cellular revenues. It gained 7c to 583 on turnover of $64 million to add to Tuesday's 6c gain.

Murray Rutherford of JB Were said the bad news had already been priced into Telecom given its poor run since April when its share price was at $9.65. Telstra also rose 20c to $8.65.

The Warehouse was another star of the day, up 25c to $6.75 on light volume worth $2 million. "The fact that it may list in Australia in the not too distant future is seen as positive for the stock," Mr Leggat said.

Lion Nathan continued to perform well, up 10c at $5.50, as did DB Group, up 5c to 335, and Fisher and Paykel, up 10c at $7.05.

AMP gained 32c to $24.45 after media reports that it might ditch its troublesome GIO subsidiary.

On the negative side, Contact continued to soften, down 10c at $2.83. Cavalier Corp fell 15c to $4.70.

In other news Taranaki's Powerco said it would list early next month and its likely pricing would place it in the top 40 index.

- NZPA