NZ stocks: Takeovers pump up sharemarket

By SIMON HENDERY

The sharemarket is expected to bubble along this week as takeovers - both real and rumoured - fuel investor interest.

Stocks with good yields continue to be sought, said Direct Broking retail manager Brett Wilkinson.

Takeover bids for Frucor and Contact Energy meant added liquidity because of the cash in the pockets of shareholders selling their investments.

Carter Holt Harvey is likely to continue its strong run, both on speculation that a takeover offer could be in the wind, and renewed interest in cyclical stocks, flowing from bullish sentiments on the pulp, paper and forestry sector coming from the US.

An expected reweighting of the Morgan Stanley Capital International index could also prove positive for Carter Holt and market heavyweight Telecom.

Sky City's two-for-one share split takes effect from today, pushing the stock back below the psychologically significant $10 level.

"While in theory the share-split should not affect Sky City's share price, I suspect it will look a little cheaper at [the post-split price] of under $7," Mr Wilkinson said.

Fisher & Paykel's healthcare and appliances shares are expected to have a quieter week, after reaching equilibrium following their listing last week.

Briscoe Group is due to register offer documents for its $40 million public float this week. The issue closes next month, and the retailer's listing is expected to inject some spark into the market when it begins trading.

The NZSE-40 has bumped up against a level of resistance just over the 2000 mark.

Shareholders at Wednesday's Auckland International Airport annual meeting will be looking for an update on how passenger numbers are faring in the wake of the global travel crisis.

On the same day, at Baycorp Holding's annual meeting, shareholders will be asked to vote on the company's $1.9 billion merger with Australian company Data Advantage. If the deal is approved, the meeting will be Baycorp's last, with control of the merged entity shifting across the Tasman.

Advantage shareholders meet on Friday, and are likely to grill the company about the $65.8 million annual loss it reported in August, which included $60 million in goodwill writedowns.