NZ stocks: Market flat, await MSCI changes

12.10pm

The New Zealand sharemarket opened quietly today with US investors sidelined by a Thanksgiving holiday, but looks set for some action later in the day as the new Morgan Stanley Capital Index (MSCI) weightings kick in.

The benchmark NZSE-40 Capital Index was down a quarter of a point at 1948.75 by 11.30am, on shares worth just $27.6 million.

"There'll probably be a bit of fireworks later in the day with the MSCI changes," Forsyth Barr Frater Williams broker David Price said.

"Basically it will be Telecom versus the rest of the market. Telecom is going up and the others are going down in terms of weightings, so you'd expect Telecom to push on up a bit."

The MSCI is one of the world's most widely tracked indices, and is used by offshore fund managers to balance their portfolios.

The latest revamp, which takes effect from the close of trade today, adjusts the weighting of stocks in the local MSCI index to more closely reflect each company's free-float of shares -- the proportion of shares which can actually be traded.

Telecom, New Zealand's biggest company by market capitalisation, is set to have its weighting boosted by about 5 per cent in the latest round after 21.5 per cent shareholder Verizon sold down its stake to global institutions in September -- thus increasing the company's liquidity.

Shares in Telecom were up 3c at 480 this morning and accounted for the lion's share of morning turnover at $17.6 million.

Market number two, Carter Holt Harvey, which with half of its shares controlled by US-based International Paper is much less freely-traded, was steady at 169 after a four cent gain yesterday.

The forest products company announced yesterday it was looking at setting up a log exporting partnership with the receivers of the Central North Island Forests Partnership.

Discount retailer The Warehouse was steady at 708 ahead of its annual meeting in Auckland today.

The company said in meeting notes that its 50 per cent dividend payout was likely to remain in the short term given the planned level of capital expenditure in the 2002/2003 year.

Among the other leaders, Auckland Airport added a cent to 516; Briscoe Group was up 3c at 265; Contact Energy was a cent lower at 385; Fletcher Building lost a cent to 321; Fisher and Paykel Healthcare dropped 5c to 1035; Sky City fell 10c to 740; Tranz Rail was steady at 101 and its rights shares were down a cent at 25c.

Falls narrowly outpaced rises by 26 to 25 among the 108 stocks traded so far.

US markets were closed overnight for the Thanksgiving holiday and will reopen tonight for a half day.

- NZPA