NZ stocks: Sky City, F&P in fine form

Trade on the sharemarket was patchy yesterday, but Air New Zealand shares found some equilibrium after recent falls.

The NZSE-40 capital index gained 2.36 points, or 0.12 per cent, to close at 2038.00 while the small companies' NZSE-SCI capital index fell 8.26 points to 5419.12.

Turnover of 28.05 million, valued at $66.40 million, was topped by Telecom's $19.23 million of shares traded.

Craig Robins of Salomon Smith Barney said Air New Zealand shares were still very much on the radar screen, despite the small movements - the freely held B shares closed unchanged at $1.33 and the As gained 1c to $1.11.

"There was just over 1 million Bs traded - the price didn't change so it just seems to have found a bit of a level.

"There's still obviously a lot of uncertainty surrounding the Singapore Airlines proposal, but that will hopefully become clearer over the coming days and weeks. It's really in the hands of the Government at the moment," Mr Robins said.

Air New Zealand would not say how much a proposed rights issue would raise, but brokers said it would need to be significant to right the company's finances and help fund a $3 billion to $5 billion fleet replacement programme.

Telecom fell 5c to $5.40 and Telstra dropped 10c to $6.80 while casino operator Sky City rose 70c to $11.15.

Mr Robins said that was partly a bounce back from Sky City's 45c drop on Wednesday to $10.45, the price at which a discount broker offloaded the paltry amount of 260 shares shortly before the market closed on Wednesday.

"It's probably a little bit exaggerated today but it is strong - it's probably up 25c," Mr Robins said.

Natural Gas Corp shares fell 3c to 92c after a trading halt was put on parent Australian Gas Light Co's shares yesterday morning, pending an announcement about NGC.

After the market closed, Powerco said it had arranged to buy NGC's Hutt Valley and Porirua gas assets for $118 million. Powerco closed down 1c at $1.75.

Fisher & Paykel gained 20c to $11.25, as interest remained high in the company ahead of the split between its healthcare and whiteware divisions.

Stocks with relatively certain earnings, such as F&P and Sky City, are currently popular with investors, but the New Zealand sharemarket remained "pretty patchy," Mr Robins said.

"Looking for further direction [US Federal Reserve chairman Alan] Greenspan is pretty important in the next week in terms of determining where interest rates are going. We're suggesting a 50 basis point cut [to 3.50 per cent] out of the US next week with another 25 basis points to come later on."

Among the big rises, Tranz Rail jumped 33c to $3.93, fishing company Sanford rose 15c to $6.45, Baycorp put on 16c to $12.35, brewer Lion Nathan gained 13c to $5.45 and WestpacTrust was up a strong 23c to $16.29.

- NZPA