NZ stocks: Shares follow offshore markets lower

New Zealand shares shed almost one per cent today as an offshore rally earlier in the week proved short-lived.

The benchmark NZSE-40 capital index ended down 19.26 points, or 0.99 per cent, at 1934.60 on turnover worth $65 million.

British stocks crumbled and Wall St snapped a two-day rally overnight, sending a negative tone through markets worldwide, ABN Amro Craigs retail equities adviser Nigel Scott said.

Here, some of the heaviest losses were felt among the leaders, with Telecom off 3c to 449, Carter Holt Harvey down 2c at 174, Fletcher Building a cent lower at 352 and retail heavyweight The Warehouse shedding 20c to 560 - close to its year low of 550.

"I think institutional shareholders have a little bit of cash raising to be done and most of those leaders have drifted lower over the day," Mr Scott said.

Falls outnumbered rises by 62 to 35 among the 136 stocks traded.

Other losers included Briscoe Group, which shed 6c to 244; Ports of Auckland, down 15c at 635; Independent Newspapers (INL), down 6c to 310; Sky TV, down 13c to 355; and Waste Management, down 2c to 306.

"Although the corporate results have been pretty good in a lot of those stocks, the market still just doesn't have the liquidity in it to come from the buy side at the moment," Mr Scott said.

INL rallied strongly yesterday on its $38.8 million first half result, up 43 per cent, as did its 66-per cent pay TV subsidiary Sky Network TV which posted a narrower $4.37 million half year loss.

Macquarie Equities investment director Arthur Lim said there were two key talking points on the market today - Rubicon's move to increase its Fletcher Forests stake to just under 20 per cent; and a transTasman tax deal penned between Finance Minister Michael Cullen and Australian Treasurer Peter Costello.

Rubicon, Forests' biggest shareholder, said yesterday it had spent $14.4 million increasing its stake from 17.6 per cent to 19.997 per cent. Six months ago Rubicon tried to exit the company through the failed Central North Island Forestry Partnership deal, so the latest move raised eyebrows in the investment community.

Rubicon was a cent lower at 71c today, and Forests was down 3c at 107.

Under the tax deal - called "triangulation" - New Zealand companies and individual shareholders with Australian investments stand to reap millions of dollars in dividends from April 1 as it changes the way profits are taxed.

Until now, such profits have been taxed twice - once in Australia and again here. From April profits of New Zealand and Australian companies doing business in each other's country will have their tax payments recognised in both countries.

Mr Lim said the deal would make it more attractive for Australians to invest in New Zealand stocks.

Shares in Vertex dived after the plastic container maker lowered its full year profit forecast for the year ended March 31.

Vertex said it was now expecting earnings before interest and tax (ebit) to come in between $9.2 million to $9.6 million compared with the previous estimate in September of $10.1 million.

It closed 14c lower at 151 after earlier trading as low as 145.

Millionaire businessman Sir Selwyn Cushing yesterday sold his recently acquired 7.5 per cent Vertex stake to Christchurch businessman George Gould. The stock has now lost most of the gains it made in the last week after the pair engaged in a bidding war for the company.

Rural services company Wrightson ended down 2c at 115 after posting a net after tax profit of $4.1 million for the half year to December, down from $6.3 million a year earlier.

- NZPA