NZ stocks: Powerco and Telecom push up market

12.20pm

Strong interest in Powerco and Telecom helped push up the sharemarket in early trading this morning.

By 11.35am today the benchmark NZSX-50 gross index was up 9.67 points to 2789.96, while the NZSX-All capital index was up 3.26 points to 929.62.

Of the 113 stocks traded by 11.35am there were 42 rises and 21 falls, amounting to total market turnover worth $36.4 million.

Telecom rose 3c to 589 on turnover worth $14.1 million.

Energy company Powero had the second highest value turnover at $8.98 million, rising 2c to 208.

After the market closed last night Australia's Prime Infrastructure issued a formal takeover offer for Powerco. The offer follows Prime's securing 53.65 per cent of Powerco in August from Powerco's three biggest shareholders -- New Plymouth District Council, Taranaki Electricity Trust and Powerco Wanganui Trust.

Under the Takeovers Code Prime was obliged to make a full takeover offer to Powerco's 20,000 shareholders. Its offer is $2.15 a share, -- 62.5 per cent in cash and 37.5 per cent in Prime debt securities. Some shareholders could also qualify for a cash only offer.

First NZ Capital's Barry Lindsay said there seemed to be good two-way business in the stock as a consquence of the formal bid being launched and its details announced.

Fellow energy stock, Contact Energy did not fare so well this morning, falling 1c to 594, after climbing 8c yesterday. TrustPower was also down, falling 4c to 460.

Meanwhile NGC continued to gain as the market waits to see if Vector will make a takeover bid. NGC was up 1c to 308 by 11.35am.

Air New Zealand was unchanged at 187, after the High Court yesterday clipped its wings and ruled against its proposed $550 million alliance with Qantas.

The airlines were appealing an earlier Commerce Commission ruling, which blocked the proposed alliance, saying it would have lessened competition and led to higher airfares. Mr Lindsay said he had not expected the stock to move much following the decision, as the market had not priced in an advantageous decision regarding the alliance, prior to the High Court's ruling.

Interest remained high in Tower, which rose 2c to 210, on turnover worth $3.67 million. Last week the company announced plans to spinoff its Australian wealth management business.

Other stocks on the move today included: Carter Holt Harvey up 5c to 236, Fisher & Paykel Appliances up 2c at 406, F&P Healthcare up 5c at 1470, Ports of Auckland up 9c at 675, and Fletcher Building down 4c at 546.

- NZPA