NZ stocks: Shares hit second consecutive closing high

Continued interest in top stocks with good yields, including Carter Holt Harvey, Contact Energy, Fletcher Building and Telecom pushed the New Zealand sharemarket to its second consecutive closing high today.

The leading NZSX-50 gross index finished 14.7 points or 0.58 per cent higher at 2547.76, while the NZSX-40 capital index was 11.97 points or 0.52 per cent higher at 2302.15.

"There's still quite a bit of buying interest in the market but there's not much liquidity," Direct Broking's Peter Lynds said, adding that investors were continuing to chase stocks with good yields.

Goldman Sachs JB Were institutional adviser Joe Gallagher said trade in Carter Holt Harvey and Contact Energy had been major features on today's market.

Carter Holt Harvey ended the day 4c higher at 212, while Contact also rose 4c to 528.

Carter Holt was continuing to trade higher for two principal reasons, Mr Gallagher said.

"One is there is continued speculation that they have received some strong bids for their tissue business and that (sale) is going to be announced imminently.

"Two, is that Asian spot pulp prices are continuing to move higher", Mr Gallagher said.



Shortly after the market closed Carter Holt announced it had agreed to sell its tissue business to Svenska Cellulosa Aktiebolaget Sancella for $1.015 billion.

Meanwhile, Mr Gallagher said Contact's strong recent moves higher had been powered by repeated comments by management that they expect retail prices to move higher as wholesale prices increase, and a recent announcement by competitor Genesis Energy, "that they would be unlikely to be chasing further retail customers aggressively making it a more stable environment for the market".

Contact has also risen on reports potential buyers were lining up for majority owner Edison Mission's sale of assets.

Meanwhile, market leader Telecom "just won't lay down", Mr Gallagher said.

The company showed the strength of its current upward momentum by finishing the day a cent higher at 580 despite news that competition regulator the Commerce Commission is taking legal action against it.

The commission has begun proceedings in the High Court over Telecom's retail and wholesale charges for high speed data services.

Mr Gallagher said initial reaction to the news sent the stock lower by a couple of cents but it recovered when the market realised the scale of penalties likely to be imposed if the High Court found against Telecom would be relatively small.

Elsewhere on the market, Direct Broking's Mr Lynds said there were a number of other firm spots.

Fletcher Building was up a cent to 437.

"They've got a bit of yield on them and that's what the market's looking for, that's what's underpinning the market to some extent," he said.

Mr Lynds said other yield stocks including the Fisher & Paykels, and Sky City were "all just a touch better here and there".

Wood processor Tenon was 3c higher at 140. Tomorrow is the record date for the company's capital return to shareholders resulting from the sale of much of its forests.


Fisher & Paykel Appliances was up a cent to 424, Fisher & Paykel Healthcare was up 2c to 1170 and Sky City was up 5c to 440.

Mooring Systems was up 45c to 420 after announcing a European licensing deal.

Other stocks to move included: BayCorp Advantage up 4c to 300, Briscoe down 2c to 150, Dorchester Pacific up 7c to 253, GRD up 10c to 220, Independent Newspapers Ltd up 7c to 475, NZX up 10c to 840, TelstraClear down 6c to 534, the Warehouse down 4c to 434, and Waste Management up 10c to 440.

There were 62 rises and 39 falls among the 141 stocks traded today and total turnover was worth $90.36 million.

- NZPA