NZ stocks: Frucor, Carters and Sky City drive shares higher

12:00 pm

Good performances by takeover target Frucor, Carter Holt Harvey and old favourite Sky City, drove the local sharemarket a little higher this morning.

The benchmark NZSE-40 index was up 4.38 points at 2018.12 by just after 11am, on turnover worth $36.5 million.

JB Were senior investment advisor Peter Stokes said individual performances, rather than an overall positive tone, were giving the bourse momentum this morning.

Frucor was up 5c at 250 - a fresh all-time high - after the company's independent directors today rejected the takeover offer of French giant Groupe Danone.

An independent valuation by Grant Samuel put a price of $2.53-$2.96 per share on the beverages company.

Danone, the world's biggest water bottler, launched a $294 million bid for Frucor last month, offering $2.35 a share for all of the company. Since then Frucor's share price has soared from $1.88.

"That report may be a little bit higher than what the market was looking at. It seems to be a healthy valuation for it," Mr Stokes said.

Carter Holt Harvey, the second-largest company on the index, was up 8c at 164 - a two-month high - on turnover worth $3 million.

ABN Amro institutional dealer Nigel Scott said Carters was benefiting from renewed investor interest in cyclical plays, a switch out of Contact Energy and into Carters and a good report card on the pulp and paper and forestry sector released in the US earlier in the week.

"There has been a bit of a major order in Carters for a couple of days - a bit larger than normal market. They have been prepared to pay up for the stock so that has sort of driven the stock from $1.50 to $1.55 and sort of cleaned out the sellers.

"By default it is probably getting a bit of buying because people are struggling to find other things to buy here in the near term.

"A week and a half ago the stock was going through at low $1.40s."

JB Were's Mr Stokes said a large parcel of 600,000 Carter shares was crossed this morning at 165.

Elsewhere in the market the tone was a bit directionless.

"You haven't got a uniform tone for the market. It is just one of those days where stocks are trading on their individual specifics," Mr Stokes said.

"There have been some very good gains recently so to stay above 2000 - we should be grateful for that."

Sky City was up 14c at 1259 on its last day of trading before a two-for-one split. The split will push the top performing shares below the key $10 mark, improving the stock's liquidity and attractiveness to investors despite the dilution.

New Zealand investors typically avoid stocks priced above $10.

Market debutant Fisher & Paykel Healthcare slipped a tad, trading down 9c at 1560. Its kitchen and laundry appliance cousin Fisher & Paykel Appliances rose 10c to 890.

"The last couple of days the stocks have been finding their levels, probably reaching their equilibrium," Mr Stokes said.

"I wouldn't expect any significant moves out of those two now that investors have had a couple of days to digest the implications of two separate operations."

Market leader Telecom fell 6c to 479 after Australia's Telstra yesterday confirmed it was taking over Clear, creating a slightly stronger competitor for Telecom in its merger of Clear and TelstraSaturn.

Auckland Airport was up a cent at 361, Sky TV was down 8c at 365 and Restaurant Brands was down a cent at 184.

Lion Nathan was up 5c at 545, Brierley added a cent to 29c, meat processor Richmond was up 8c at 268 after announcing a $50 million capital notes issue yesterday and Wrightson was up 2c at 122.

In all, rises outnumbered falls by 41 to 24 among the 110 stocks traded.

In the United States overnight investors bid blue chips higher for the third straight session, but a scaled-down outlook for the US economy limited the advance, and profit taking caused a dip in tech stocks.

The Dow Jones industrial average closed up 48.78, or 0.5 per cent, at 9,872.39. The Dow has gained 318 points in its three-day advance and is approaching 10,0000, a level that has eluded the blue chip index since September 5, when it closed at 10,033.27.

The broader market was mixed after advancing earlier. The Nasdaq composite index fell 2.60, or 0.1 per cent, to 1,900.59, and the Standard & Poor's 500 index rose 1.05, or 0.1 per cent, to 1,142.26.

- NZPA