NZ stocks: Sleepy shares lift head ahead of Xmas

12.00pm

The sleepy New Zealand sharemarket rallied a little this morning ahead of the Christmas break.

Just after 11am the benchmark NZSE-40 capital index was up just 0.41 points to 1911.36, in line with a more positive Wall St today.

Topping the $25.4 million turnover was Telecom which was steady at 438, three cents off its year low.

Telecom, which had come under "so much pressure" from critics of its strategies, appeared not to have made much response through the media, ASB Securities broker Andrew Kelleher said.

Australasian brewer Lion Nathan was close behind in turnover, up 2c to 592 on $2.9 million shares, after a 17c loss yesterday.

Brokers noted the stock was not very liquid and tended towards big fluctuations in share price. On Friday Lion Nathan confirmed it was on track for a forecast 11 per cent profit rise in 2002/03.

Most of the other Top 10 stocks were in the black, with Contact Energy edging up 3c to 380 after sliding 22c yesterday, 15c of that due to a dividend payout.

Fletcher Building gained 4c rise to 338 on strong volume, and casino operator Sky City was up 8c to 790 (up 10c yesterday).

Mr Kelleher did not think Sky City's position had changed since the start of the year, but it was tilting at the $8 mark reached before a dividend payout in November.

"Good stocks are some times hard to find at the moment, so you tend to find stocks that are doing well, that are an easy pick, so to speak, are going really well."

Retail stocks, which were the toast of the top 40 yesterday, looked set for another good day based on the import benefits of a stronger currency and solid Christmas trading.

The Warehouse was up 2c at 722 this morning after a solid 14c rise yesterday, while fellow retailer Briscoe Group was up 5c at 279, and Pacific Retail was up 3c to 280.

Others on the up and up included Restaurant Brands, up 4c to 159.

The company, which runs KFC, Pizza Hut and Starbucks franchises in New Zealand has risen 20c in the last week after a reasonably positive quarterly report.

"There was an awful lot of bad news was priced into that share price when it got down under $1.50," Mr Kelleher said.

"The reality is they have some fairly good cashflows and underlying yield was going to always support that share price.

"Assuming they don't drop the ball, they are a solid safe stock."

On the downside, Air NZ was off 3c to 49 on high volume of 1.7 million shares, ahead of tomorrow's expected decision from the Government on whether it approves of the Air NZ-Qantas alliance proposal. Star performer Auckland Airport shed 4c to 545.

Rises outnumbered falls 32 to 20 on 99 stocks traded.

On Wall St, investors looked past the threat of war with Iraq to 2003 and its prospects.

The major market gauges posted their biggest single-day gains in almost three weeks, as fund managers facing a third-straight year of a down market positioned themselves for 2003, taking cash from safe havens like government bonds.

The Dow Jones industrial average jumped 193.69 points, or 2.3 per cent, to 8627.40. The broader Standard & Poor's 500 Index rose 20.93 points, or 2.35 per cent, to 910.41. The Nasdaq Composite Index was up 37.98 points, or 2.79 per cent, to 1400.40.

- NZPA