NZ stocks: Market remains indifferent despite Telecom result

12.00pm

A solid half year result from market heavyweight Telecom this morning failed to see off the pre-reporting season inertia and negative sentiment that has dogged the New Zealand sharemarket's recent sessions.

By 11.30am the benchmark NZSX-50 gross index was 2.97 points or 0.12 per cent lower at 2429.59, while the NZSX-40 capital index was 3.41 points or 0.15 per cent lower at 2246.53.

Telecom was 2c higher at 555 after initially surging 6c and nudging the market's indices into positive territory after they had recorded six consecutive days of losses.

However the market's underlying slack tone became apparent later in the morning in quiet turnover by 11.30am of $29.38 million on 19 rises and 45 falls among 116 stocks traded.

Before the market opened Telecom reported a December half-year net profit of $365 million -- bang on analysts' forecasts. The company also announced details of its eagerly anticipated hike in dividend payout.

It the 2004/5 year it will pay 7.5 cents per share (cps) in the first three quarters and review the situation for the final quarter payout.

Macquarie New Zealand investment director Arthur Lim said the news would be welcomed by investors.

"We would expect the dividend rise to provide a lot of support for the stock because it is quantum leap in payout."

Telecom Roderick Deane said raising the dividend pay-out ratio sent a clear signal to shareholders of "our confidence in the business and our commitment to increasing returns to shareholders".

But elsewhere on the market the dull mood persisted.

The market's number three stock Contact Energy was down 5c to 528 by 11.30am, Steel and Tube Holdings was down 7c to 400, infrastructure investor Infratil was down 2c to 273, and fishing company Sanfords was down 20c 15c to 515.

"It's pretty quiet, there's a lack of buying interest in certain places," Direct Broking's Peter Lynds said.

"I think it's anticipation of the reporting period coming through."

Briscoe Group was a cent higher at 157 after yesterday losing 8c following a disappointing half year result.

Fellow retailer The Warehouse was down 5c to 507, "that's probably a rub off from Briscoes announcement", Mr Lynds said.

Jeweller Michael Hill was up 8c to 510.

Other stocks to move by 11.30am included: Auckland International Airport down 2c to 655, Cavalier Corp up 5c to 510, Fisher & Paykel Healthcare up 5c to 1230, Freightways down 4c to 226, NGC Holdings up 3c to 222, NZ Refining Co down 19c to 1611, NZX up 4c to 635, and TelstraClear down 6c to 545.

- NZPA