NZ stocks: Sharemarket firms despite hawkish Reserve Bank statement

12.15 pm

The sharemarket firmed mildly today despite the tone of the Reserve Bank's quarterly Monetary Policy Statement being more hawkish than expected.

Far from heeding calls from Business New Zealand and some bank economists to cut interest rates, Reserve Bank Governor Don Brash held the Official Cash Rate and said he expected rates to rise mildly "over time".

But brokers said the statement was largely as expected.

The benchmark NZSE-40 index was up 4.00 points to 2054.36 by shortly after 10 am. There was little influence from overseas where Wall Street eased a tad.

Total turnover was again modest at $16.5 million.

Telecom's price jagged about, but by 10.30 am was up 7c to 527 following its annual result yesterday. Despite losing $38 million in its fourth quarter, mainly due to a big writedown in Australia, analysts said the Australian performance looked quite impressive.

Most interest was in Montana where Lion is in the process of a forced sale of a 19 per cent stake deemed to be in default. Montana was up 25c to 460, which brokers said was indicative of the price Lion is expected to bid to buy the stock back when it is allow to.

Allied Domecq has a full takeover on the table at 480/share but it is conditional on obtaining over 50 per cent.

Wrightson, which gained 6c on its well-received result yesterday, added another 6c today to lift to 110. The company is seen as a bellwether for the recovering rural economy and has soared from 63c at the start of this year and 43c at the start of 2000.

Frucor was up 2c to 172 after posting a result in line with expectations but half that of the prospectus forecast last year.

Air New Zealand B shares were up 4c to 134, Carter Holt Harvey was up 1c to 173, North Port was up 3c to 210, Sanford rose and then dropped back 5c to 680 and UnitedNetworks was up 5c to 865.

There were 33 rises and 18 falls among the 96 stocks traded.

- NZPA