NZ stocks: Riding out the offshore maelstrom

The New Zealand bourse continued its journey in negative territory yesterday. The NZSE-40 capital index closed down 8.12 points, or 0.42 per cent, at 1909.74.

However Credit Suisse First Boston dealer David Price said the market had performed relatively pleasingly considering weak results in offshore markets.

Fletcher Forests, down 3c at 35c, led by volume with 7.46 million shares traded, but market giant Telecom, steady on 550, led the money stakes with turnover of $14.60 million.

Total market turnover was 32.63 million shares valued at $75.83 million. Falls outnumbered rises 71 to 38.

Fletcher Energy was the main talking point in an otherwise unspectacular day, rising 11c to 836 on 1 million shares traded.

"I assume people are taking a positive stance to the resubmission of Shell's bid to the Commerce Commission," Mr Price said.

Fletcher Energy said on Wednesday that further appraisal of its coastal Pohokura discovery in Taranaki increased its confidence in reserve estimates, although it has not changed them. However, Energy said that production of oil and gas across all its wells fell slightly in the September quarter, to 12.9 million barrels of oil equivalent from 13.08mboe in the 1999 period. The primary reason was shutdowns related to development of the Maui BD oil project off the Taranaki coast.

Baycorp, down 10c at $11.90, was one of the main volume players on the downside, with $7.71 million traded. Baycorp stock fell 30c on Wednesday after retired director Charles Bidwill offloaded a chunk of stock at $11.90.

"I think the price has now been set so you've got a few people drawing a line in the sand. We'll wait and see where to from here," Mr Price said.

Telstra tumbled 37c to 791, AMP fell 14c to $22.40, Sky TV fell 10c to 315 and The Warehouse was down 5c at 585.

Contact rose 2c to 280, Montana was up 2c at 312, Nuplex gained 5c to 310 and Axa put on 6c to 356.

The Dow Jones index in the US closed under 10,000.

"You've got stocks [in the US] trading on 100-150 times earnings and all of a sudden one of its compatriots doesn't hit target, so they're not earning even what they said they were going to earn and the multiple becomes 170 or 200 times earnings - that is not sustainable," Mr Price said. "People start to look at the high multiple stocks and say,'Do I want to be there?', and the answer quite clearly seems to be no."

- NZPA