NZ stocks: Rubicon crossing the market's only sign of life

12.00pm

The New Zealand sharemarket exhibited little sign of life, despite the purchase of a large stake in biotechnology company Rubicon before the market opened.

By mid-morning the NZSE-40 capital index was down 0.85 points, or 0.04 per cent, at 2062.01, on turnover of 58.00 million stocks valued at $57.57 million.

Rubicon, formed from parts of the former Fletcher Challenge group, topped volume with 50.50 million shares worth $37.86 million changing hands via JB Were, to what is speculated to be an overseas buyer.

Forsyth Barr Frater Williams executive director Don Turkington said the market was "very quiet indeed".

"There were quite a few crossings pre-market but actually on-market activity is pretty hard to find and price movements are not great either way.

"JB Were crossed that big line in Rubicon -- 50-odd million shares right at 8.15am, at 75c, but they haven't bought anything on-market.

"It's definitely an asset play because if this Fletcher Forest deal goes ahead it has over $1 of value, so it's trading at a big discount to its asset-backing," Dr Turkington said.

On-market, Rubicon shares opened up 3c from yesterday's closing price of 69 before rising to 71 by mid-morning.

The parcel of Rubicon shares sold for $37.8 million.

Market players said yesterday the buyer was taking a bet that the Fletcher Forests and Citic deal to buy the Central North Island Forestry Partnership, would go through. The deal involved the huge Chinese government-owned investment company Citic taking a 35 per cent controlling stake in Fletcher Forests.

Part of the deal also involves Citic buying Rubicon's 17 per cent stake in Fletcher Forests in exchange for a forest in the North Island.

Elsewhere on the market, The Warehouse was up 3c at 750, Tranz Rail was up 5c at 290, Auckland Airport rose 8c to 428, BIL International gained 1c to 65, Fletcher Building was up 3c at 274, and Waste Management gained 4c to 308.

Telecom lost 3c to 498, Fisher & Paykel companies Appliances and Healthcare were down 7c at 883 and 15c at 785 respectively, Carter Holt Harvey lost 1c to 193 and Independent Newspapers Ltd was down 5c at 370.

All moves were on light volume.

There were 24 rises and 21 falls on the 89 stocks traded.

Wall Street managed to claw back some lost territory ahead of the July 4 holiday in the US.

The benchmark Standard & Poor's 500 Index broke a three-session losing streak to rise 5.90 points, or 0.62 per cent, to 953.99, after falling to a 4-1/2-year low on Tuesday.

The Dow Jones industrial average rose 47.22 points, or 0.52 per cent, to 9054.97, and the technology-laced Nasdaq Composite Index was up 22.35 points, or 1.65 per cent, at 1380.17, after sinking to five-year lows over the past two sessions.

- NZPA