NZ stocks: Shares rise on Telecom result

12.00pm


The New Zealand sharemarket responded immediately this morning to a favourable profit result from its biggest player Telecom Corp.

The NZSX-50 gross index rose 15 points, shortly after the market's open, and by 11.45am rose another point to take it to 2175.5, 0.75 per cent higher than its open. The NZSX-40 capital index was up 12 points, or 0.58 per cent, to 2102.02.

Telecom which carries a 28 per cent weighting in the NZSX-50, rose immediately after announcing it had lifted its June year net profit to a better-than-expected $709 million from a $188 million loss last year. By 11.45am it was 10c up at 524.

The telco also announced an unchanged fully imputed quarterly dividend of five cents a share.

Analysts on average had forecast a net profit of $688 million for the year.

"Clearly the market liked it," ABN Amro Craigs operator James Lock of the result said.

"The market's happy. At first glance, we saw everything that we wanted to see."

The net profit was better than market expectations but he said the signal that the company will pay out a higher proportion of profits in dividends, while expected, was the key.

"It'll lead to a re-rating in the stock based on the better cashflows."

Mr Lock said the timing of the dividend hike was not clear. "Indications are it will be in the first or second quarter of the 2004 year which will be pretty positive."

Meanwhile, on the overseas markets, the US blue-chip Dow Jones industrial average ended Monday's session slightly higher, while the tech-laden Nasdaq edged down as investors awaited more clear-cut signs of a long-anticipated economic rebound.

In London, Britain's top shares crept up as traders warmed to forecast-busting results from banking giant HSBC .

In Europe stockmarkets ended Monday near session lows, dragged down by some heavily weighted banks including Deutsche Bank.

In Japan the Nikkei ended down 1.65 per cent at its lowest close since July 1.

Back on the local market this morning Briscoe Group's shares fell 9c in morning trade to 178.

Before the market opened, the discount retailer said its sales rose almost 11 per cent for the three months ended July 3, and it expected an after tax profit for the first half in line with the $9.6 million net profit for the same period last year.

Stocks to rise in early trade today included: Auckland International Airport up a cent to 594, CarterHolt Harvey up 3c to 165, Contact Energy up a cent to 481, Fisher & Paykel Appliances up 14c to 1360, Sky City up 5c to 915, Telstra up 2c to 518, Trustpower up 5c to 485, and Waste Management up 7c to 367.

Stocks to fall included : Air New Zealand down a cent to 49, Hallenstein Glassons down 4c to 285, Ports of Tauranga down 3c to 422, and Tower Group down 3c to 129.

Rises outnumbered falls 32 to 18 on the 106 stocks traded by 11.30am on turnover of $22.6 million.

- NZPA