NZ stocks: Sharemarket rises after Air NZ deal unveiled

12.00pm

The New Zealand sharemarket, after falling in early trade, took off on news that Qantas is to take a 22.5 per cent stake in Air New Zealand.

The NZSE-40 capital index, down 4.2 points before the midday announcement, was then 3.07 firmer at 1951.86 on reasonable turnover of $27.2 million.

Air New Zealand shares had been suspended before trading began. After the deal for a new alliance between the trans-Tasman airlines was unveiled, Air NZ jumped 4c to 54 on turnover of 1.4 million shares.

Telecom shares were up 4c to 466 on 2.3 million turnover.

Tranz Rail shares, having earlier dropped 20c to a new record low of $1.05 because the head shares are now trading ex rights, were down 4.2c at $1.00 after midday.

Baycorp continued its recovery, rising 4c to 230. It has risen 47 per cent from 158 since it fell spectacularly earlier this month following a profit warning.

Richmond rose 50c to 240 following a court decision on Friday ordering the southern meat company PPCS to either make a full takeover offer or to forfeit 6.7 million shares in the Hawke's Bay meat company -- equivalent to 16 per cent of its stake.

PPCS has 10 days to respond and may yet appeal the decision.

Sky City, which was ex a 20c dividend, was down 18c to 774.

Cavalier, which has had a superb run this month, succumbed to some profit taking, falling back 9c to 790.

There was $6.9 million of Lion Nathan traded off market. It was 2c ahead at 588.

Other moves included: Carter Holt Harvey down 2c at 167, Ports of Auckland down 10c at 630, Trust Power down 5c at 350 and Vertex down 4c to 130.

There were 28 rises matched by 37 falls among the 105 stocks traded.

- NZPA