NZ stocks: Local market slips on thin trade after US holiday

A hearty first quarter result from the market's number three stock Contact Energy failed to offset a lack of overseas direction as the New Zealand sharemarket slipped lower in thin early trade this morning.

By 11.30am the NZSX-50 gross index was 6.99 points or 0.29 percent lower at 2424.06, while the NZSX-40 capital index was 6.5 points or 0.29 percent lower at 2238.29. Turnover was a paltry $11.44 million with 17 rises and 36 falls among the 101 stocks traded.

Market leader Telecom was the most traded stock with $4.48 million of it shares changing hands, but it was 2c lower at 551.

ASB Securities' Andrew Kelleher told NZPA the general tone across the top of the market was marginally negative, " We're trading in one of those vacuums because offshore markets were shut overnight, its just domestic news only".

Yesterday US markets remained shut for the Presidents' Day public holiday.

Meanwhile, Contact Energy was 4c lower at 514 after initially spiking 3c higher on opening this morning. The electricity retailer and generator said its net profit after tax for the three months to December 31 2003 at $27.5 million was 49 percent higher than the same period a year ago. The company also announced plans to retail electricity in Victoria, Australia.

ASB Securities' Andrew Kelleher said there were " a few sellers around regardless of how one felt about that announcement this morning".

Mr Kelleher said the belief "there's going to be some negative corporate activity looming" had pushed the stock lower, ' 'even though on the face of it the result looked okay".

Contact chairman Phil Pryke said this morning the company's board had established an independent directors committee to deal with issues relating to majority owner Edison Mission's (EME) plans to sell off some or all of its international assets including Contact.

Contact Energy shares have fallen 12 percent in the past three weeks on speculation EME will offload its 51 percent Contact stake to institutions at a big discount.

Contact was one of a number of companies to post results this morning as the local reporting season gets fully underway.

Turners Auctions said its annual profit fell by 4.7 percent to $2.83 million as a result of its move into Canada. Its shares tumbled 20c to 450.

"People are probably focusing on the fact that they've had to stump up some money onto their Canadian operation," Mr Kelleher said.

"People seem to have a reasonable mistrust of when successful New Zealand companies put their toe in the water offshore and that seems to be the case here."

Ports of Auckland said its first half net profit after tax at $21.2 million was up four percent on the same period last financial year. By 11.30am its shares were 7c lower at 760.

Freight operator Mainfreight said its acquisition of rival Owens Group weighed on its three-quarter year result, dragging net profit after tax (npat) down to $6.37 million. Its unaudited nine-months to December result was 2 percent up on the same time last year. Mainfreight shares were a cent higher at 175 by 11.30am.

Other stocks to move in early trade included: Cavalier Corp down 3c to 525, DB Breweries up 20c to 805, Fisher & Paykel Appliances down 2c to 366, Fisher & Paykel Healthcare down 5c to 1235, Fletcher Building down a cent to 402, Hellaby Holdings down 9c to 480, NZX up 15c to 720, Pacific Retail Group up 5c to 205, TrustPower down 4c to 708, and Westfield Trust down 7c to 410.

Meanwhile on overseas markets apart from Wall St, Britain's FTSE 100 index closed 3.9 points or 0.09 percent lower to 4408.1 and Japan's Nikkei closed down 0.08 percent or 8.97 points at 10,548.72.

- NZPA