NZ stocks: Investors pay for quality

The sharemarket suffered from a dearth of corporate activity yesterday, with investors left chasing a few quality stocks.

The NZSE-40 capital index closed up 22.39 points, or 1.10 per cent, at 2048.81 while the NZSE-SCI capital index gained 19.53 points to 5522.53.

Turnover of 25.53 million, valued at $70.19 million, was topped by Telecom's $30.15 million followed by Fletcher Building's $4.49 million.

Peter Stokes of JBWere said the market's rise extended beyond Telecom's decent performance.

"It wasn't huge volume - to be honest I don't think there are too many sellers in this market at the moment. So you get the feeling that when there is some buying out there, sometimes it does take chasing the stock up a little bit to get the volume you want - it just had that feel today," Mr Stokes said.

Telecom's 13c rise to $5.28 was probably on the back of its long-awaited launch of a CDMA network on Monday, after a fairly hefty sell-off last week.

"It crept down towards that $5 mark ... and on top of the news yesterday, and a slightly positive Wall Street, it helped give the stock a push along," he said.

Telstra also recovered, closing up 27c at $6.67, to reach back to the $A5 ($6.34) mark seen as fair value at present, Mr Stokes said.

Fletcher Building was up 5c at $2.57, its highest since early last year.

Guinness Peat Group signalled to the market it was seeking capital via a notes issue, with the market expecting an issue of up to $250 million. JBWere is part of the deal.

Brokers had also said it had been oversold on the publicity over Enza's foreign exchange losses. GPG owns 36 per cent of Enza with FR Partners. GPG gained 4c to $1.72.

Elsewhere on the market, Sky City rose 20c to $11.20, Baycorp gained 45c to $13.05 against a background of speculation of a deal between Baycorp and Data Advantage, Fisher and Paykel piled on a further 25c to a new high of $12.50, and WestpacTrust rose 33c to $15.50.

"I think this is as much a case of people looking for quality stories when there's not a lot of selling out there," Mr Stokes said.

"In illiquid stocks like Baycorp and F&P, buyers simply had to pay up to get them."

Air New Zealand A shares gained 3c to $1.09 and the Bs fell 1c to $1.39. Carter Holt Harvey was up 3c at $1.77, Brierley Investments rose 2c to 68c, DB Group was up 10c at $5.50 and Lion Nathan rose 1c to $5.43.

The Warehouse was up 5c at $5.40 after news of a slight rise in retail sales for May.

Montana lost 18c to $4.35 and Contact Energy eased 1c to $3.16.

* The release of positive retail sales figures failed to budge the moribund NZ dollar.

At 5 pm the kiwi closed at 40.65USc from 40.54c on Monday.

Dean Sheridan of Citibank said the market had been extremely quiet. "We're flirting with 80Ac at the moment. It's rallied quite strongly, from 78.50c over the last week or so, so we've held up quite well although the aussie has weakened off."

- NZPA