NZ stocks: Sharemarket bounces back as investors seek out value stocks

6.06pm

Investors today nudged the value of Telecom shares up a notch or two, and with it the sharemarket's top two indices in a respectable day's trade, a broker said.

Shares in Telecom finished up 5c at 596 on turnover of $94.1 million, while third-ranked Carter Holt Harvey closed up 1c at 216.

Hamilton Hindin Greene broker Grant Williamson said the market had "bounced back nicely" in today's session.

The benchmark NZSX-50 index was up 13.05 points at 2913.67, while the NZSX-All capital index was up 4.70 points at 964.00.

There were 63 rises and 35 falls among the 165 stocks traded.

"There's renewed interest in Telecom, which has yet to issue its dividend," Mr Williamson told NZPA today.

"It looks like it (Telecom) is going to test that 600c mark again," he said.

"They seem to be stuck in a trading range of around 575c to just over 600c, so no clear break in that trend yet."

The high value of the New Zealand dollar, which today closed at US70.80c, could see some offshore investors taking profits, he said.

Mainfreight Group today issued a first half profit of $1.14m, against $3.67m in the previous same period.

The fall in profit could be pinned to costs linked to Owens Group, which it purchased recently. Owens today posted a September half loss after abnormals of $2.5 million, down on last year's loss of $513,000.

Shares in Mainfreight closed up 3c at 205, while those in Owens were unchanged at 110c.

"It's certainly taking Mainfreight some time to turn Owens around," Mr Williamson said.

"But Mainfreight have got a pretty good history at this sort of thing. It (the Owens result) just shows you what Mainfreight is capable of by itself.

"Going forward, it looks very good for those companies."

Trans-Tasman financial services group Tower, which suffered a 13c tumble yesterday despite news of a market turnaround in its September year result, lost a further 1c to 216.

Tower posted an after-tax profit for the September year of $54.6 million, from a loss of $149m last year.

"The market still doesn't like that result, but I think they (Tower shares) are fair value at these sorts of levels."

New Zealand Oil & Gas gained 6c to 108, continuing its recent run-up and hitting an all time high.

"It's been one of the better-performing stocks lately. I think the market is really starting to wake up the potential of that stock," Mr Williamson said.

"Their development projects all look very exciting," he said.

Fletcher Building was again on the rise, up 3c at 592.

Infrastructure investor Infratil was up 3c at 333 ahead of its dividend cut-off date tomorrow.

Retailer The Warehouse stacked on 8c to 376 after losing ground earlier this week.

SkyCity Entertainment was up 5c at 472 on turnover of $29.4m, Mr Williamson noting that stock was attracting some of the profits realised in recent sessions by investors.

"There's a few investors after value stocks like SkyCity... we've also seen that in (NZ) Oil & Gas," Mr Williamson said.

Other stocks to move included: AMP up 16c at 765, Dorchester up 9c at 290, NZ Refining up 10c at 2650, Pacific Retail Group up 4c at 213, and Pumpkin Patch down 3c at 232.

Overseas, the Dow Jones was up 60.52 points at 10,548.17, the Standard & Poor's 500 was up 6.49 points at 1181.92, and the Nasdaq Composite was up 20.89 points at 2099.51.

- NZPA