NZ stocks: Stocks firm as corporate results flow in

The New Zealand stock market closed firmer but in thin trade, with the focus on the developing reporting season.

The NZSE-40 capital index ended up 14.53 points at 2170.69, and smaller stocks rallied strongly with the NZSE-SCI capital index up 43.34 points to 8774.26.

Turnover was worth just $54.44 million and ABN AMRO's head of institutional sales, Nigel Scott, said light volumes were likely to be common going into northern hemisphere holidays.

Rising stocks outnumbered falls 64 to 39 among the 148 traded.

Telecom, ahead of its annual results announcement today, was up 10c at 755.

Its Australian subsidiary AAPT, itself releasing annual figures yesterday, said it expected to grow revenues by about 30 per cent in 2000/01, including the planned roll-out of its CDMA mobile phone network or its LMDS business network.

AAPT said in the first month-and-a-half of the first quarter ending September 30, it had experienced "pretty strong" growth. AAPT reported a net profit of $A36.24 million against $A29.53 million a year ago.

Mr Scott said the market was looking for Telecom to indicate some action on long-awaited divestment plans and explain any links with Japanese giant telco, DoCoMo.

The focus would also be on what would happen to Telecom's dividend as it transforms from a low cost company to a growth company. The mechanics of that process may be further illuminated today, with possible comments on cash requirements and the potential for a big international player to take a significant stake in Telecom.

ABN Amro expects fourth quarter profit to be about $190 million.

After the market closed wine group Montana unexpectedly announced it had applied for Commerce Commission clearance to acquire DB's wine operation Corbans.

Mr Scott said Lion Nathan which, assuming Foreign Investment Commission approval, has a 28.27 per cent stake in Montana, was probably angling to safeguard its own patch from Australians Foster's and Southcorp. Lion closed down 3c at $4.85, Montana shed 4c to $2.31 and DB Group was steady on $3.10.

Contact Energy jumped 6c to 260 after commenting on its profit and dividend expectations for its September balance date.

It also said it had sold its decommissioned plant at its Stratford Power Station for around $23 million to a US buyer, for a "healthy profit."

Sky Network TV posted a $26.97 million bottom line annual loss - on expectations - after accounting for an expensive push for more subscribers. Last year it made a $4.38 million loss. But sales figures showed growth was rampant, with revenue more than doubling to $204.81 million from $93.13 million. Sky closed up 3c at 420.

Other companies to report this week include Sky City tomorrow, NGC and Pacific Retail on Thursday and on Friday INL, Montana and Michael Hill.

Reporting so far has been good.

The market will pay close attention to the Reserve Bank tomorrow, with opinions divided on whether it will raise interest rates - a negative for stocks. But Mr Scott noted international investors could be quite disappointed if rates rise since they worry the economy could stall.

Among the leaders, Auckland Airport was up 8c at 293, Carter Holt eased 1c to 187, Air NZ As put on 2c to 293, NGC rose 6c to 168, and Sky City was up 10c at 745.

Fletcher Energy shed 18c to 775 but Forests added 1c to 85.

Elsewhere, Advantage dropped 16c to 276, Baycorp rose 20c to $12.40, Brierley firmed 1c to 40, The Warehouse gained 2c to 578, Wrightson rose 5c to 64, Frucor jumped 8c to 233, and Port of Lyttelton, announcing a bottomline profit of $14.86 million for the year to June 30 against $13.15 million a year ago, was up 8c at 173.

- NZPA