NZ stocks: Positive earnings forecasts help drive turnover

Positive earnings forecasts from building and tourism companies helped drive the New Zealand sharemarket to a positive close today on solid turnover.

The benchmark NZSE-40 capital index closed up 15.77 points, up 0.81 per cent, at 1962.10 on $89 million.

Direct Broking dealer Sam Macdonald said it had been a "cracker" day on the sharemarket, with standout performances from Fletcher Building and Tourism Holdings on the back of positive commentary at their annual meetings.

Fletcher Building touched a new high of 332 before closing up 15c to 331 on $4.9 million worth of trade. Yesterday the company forecast an 80 per cent rise in core earnings to around $140 million in the first half, excluding its Laminex purchase.

An overhang in the stock appeared to have dispersed and it was now rapidly heading towards a mean valuation of $3.50, Mr Macdonald said.

Battered THL rose 9c to 99 after telling shareholders today that it was expecting $4 million in half year profit.

Hard hit by a fall in tourism numbers, THL posted a net after tax profit of $300,000 for the year to June 30, after making a $2 million writedown on unusuals and following a massive $13 million slump in profit the year before.

"The company is clearly turning the corner," said Mr Macdonald.

Telecom topped turnover both by value and volume with $8.9 million worth $43.8 million, and rising 2c to 490. It appeared to be consolidating after whippy trade following yesterday's news of a 3.3 per cent drop in first quarter profit to $146 million.

There was also heavy two-way trade in Baycorp Advantage, which remained steady at 182 on 7.4 million shares worth $13.1 million.

Investors yesterday slashed about 45 per cent off the credit agency company's value after it warned it was only expecting minor growth in earnings per share (EPS) this year, with the benefits of last year's merger only flowing through in later years.

Auckland International Airport nudged up a cent to 529 after rocketing 13c yesterday. Today the Auckland City Council confirmed it was looking at an institutional book-build for part of the sale of its 25.6 per cent stake in the airport company.

Elsewhere in the market, Briscoe Group was 11c higher at 252; Carter Holt Harvey added a cent to 164; Contact Energy rose 6c to 377; Fisher and Paykel Appliances jumped 45c to 1095, and its sister stock Healthcare was up 20c at 1080; BIL International was up 5c to 62; Sky TV added 5c to 335; Fletcher Forests up a cent to 22 on the day of its AGM; and The Warehouse rose 2c at 730.

Mr Macdonald said Fisher & Paykel Appliances' healthy rise appeared to be a reflection of investors re-focusing on its fundamentals ahead of its dividend.

Profit-takers had swooped after a positive result last week, but people were now viewing the stock as undervalued.

Falls included Michael Hill down 15c to 550, and Sky City, down 2c to 768.

Rises outnumbered falls by 46 to 36 among the 122 stocks traded.

In the United States overnight stocks advanced as rosy outlooks from the technology sector and positive comments about a US economic recovery by Federal Reserve officials boosted investor sentiment on the heels of three straight days of losses.

But a pessimistic outlook from Philip Morris cooled off the blue-chip Dow Jones industrial average.

The Dow Jones industrial average gained 54 points, or 0.66 per cent, to 8413, while the broader Standard & Poor's 500 Index added 8 points, or 0.97 per cent, to 889.85. The technology-laced Nasdaq Composite Index rose 35 points, or 2.67 per cent, to 1354.

- NZPA