NZ stocks: Market flat as Air NZ remains in limbo

12.30 pm

The New Zealand sharemarket began the week fairly flat as shares in key player Air New Zealand remained in limbo today.

Despite market heavyweight Telecom's 4c fall to 437, by mid-morning the NZSE-40 capital index was up 3.79 points, or 0.20 per cent, at 1864.45.

Turnover was typically light for a Monday, with just 6.82 million stocks, valued at $16.22 million, changing hands by mid-morning. Telecom topped turnover with $5.17 million.

Greg Arnott of DF Mainland said that given the strong performance on Wall Street, Telecom could hold its ground today despite its share price drop in the US falling to 425.

The market was awaiting news on national carrier Air NZ, trading in whose shares has been halted indefinitely.

"There's a possibility that later today there will be some information out on the stock as to a rescue plan," Mr Arnott said.

"I personally think that we won't see it trade at all today and possibly won't see it trade tomorrow, until such time as a rescue plan is formalised."

The Securities Commission has also launched an inquiry into the trade of Air NZ shares following the share-boosting comments from Prime Minister Helen Clark and 30 per cent shareholder Brierley Investments' Greg Terry last week.

Both the A and B shares closed on Thursday at 40c.

"There is still an abundance of investors looking at stocks with good fundamentals that are very, very cheap now with good balance sheets, unlike Air NZ," Mr Arnott said.

"Even if the (Air NZ) rescue plan is put in place, you've still got a company which is full of holes and has an enormous amount of debt attached."

Brokers saw a lot of interest in the troubled airline's shares last week despite the poor outlook.

"I find it difficult to see any future growth in this thing for some time. It was littered with traders last week trying to pick to the top and bottom and momentum."

Some stocks had large gains on Friday with "window dressing" for the end of the second quarter. Window dressing involves institutional investors buffing up their portfolios before having to show them to clients.

Shareholders in financial services company Tower have to stump up with $76.27 million for the other half of their shares by 5pm today and, if they miss the deadline, they risk being charged interest.

The partly paid shares cease to exist after this afternoon. The amount owed is $2.825 for each of the 27 million partly paid shares.

Among the upward movers today, casino company Sky City was up 5c at 1105, Tower rose 4c to 470, jeweller Michael Hill was up 2c at 432, brewer Lion Nathan gained 10c to 600 and wood products firm Carter Holt Harvey rose 2c to 150. Brierley Investments was up 6c at 41, Cedenco gained 5c to 190, Contact Energy was up 1c at 341, Fisher and Paykel gained 10c to 1255, and TrustPower rose 5c to 305.

Auckland Airport lost 2c to 333, media company Independent Newspapers Ltd lost 4c to 305, Fletcher Building lost 5c to 255, Telstra was down 7c at 630 and Restaurant Brands lost 3c to 153.

There were 41 rises and 21 falls on the 99 stocks traded.

On Wall Street on Friday, the blue chip Dow Jones industrial average rose 165.79 points, or 1.91 per cent, to 8847.21; the technology-rich Nasdaq Composite Index gained 38.06 points, or 2.61 per cent, to 1498.77; and the broader S&P 500 index climbed 22.33 points, or 2.19 per cent, to 1040.94.

- NZPA