NZ Stocks: Telecom bounces but Forests cut back

The New Zealand sharemarket saw reasonable turnover yesterday after what threatened to be a slow start to the week.

Turnover was $78.04 million on 23.18 million shares traded, with falls outnumbering rises 58 to 42.

The NZSE-40 Capital Index finished down 2.62 points (-0.14 per cent) at 1925.94, while the NZSE-SCI Capital Index was down 30.37 points (-0.59 per cent) at 5122.38.

David Fergusson of Greenslades said trading was subdued in the new Air New Zealand rights issues.

Many had not been allocated yet, and on-market trading was relatively quiet until late-afternoon, Mr Fergusson said.

Air NZ will also seek shareholder approval at its AGM on November 1 for a possible share issue to raise $150 million.

Telecom closed up 7c at 555, on a turnover of 5.68 million shares.

Uncertainty about the regulation of telecommunications in NZ has hit Telecom hard, but the company was making a small, natural recovery yesterday.

"Obviously we are still seeing some offshore selling but the market seems to be absorbing it at the moment. We saw a predominance of buyers rather then sellers," Mr Fergusson said.

Finance Minister Michael Cullen said last week that it was "very unlikely" the Government would adopt a heavy-handed regulation approach to the industry.

Uncertainty also affected Fletcher Forests, which closed down 5c at 62. Fletcher Challenge chief executive Michael Andrews told the NZSE the company was not in a position to make any statement about its restructuring process.

The exchange's market surveillance panel was questioning Fletcher Challenge as to why its Forests share price had dropped 17c to 63c since last Tuesday.

A delay in resolving the future ownership of Forests means delays in the break-up of the two remaining Fletcher listings, Building and Energy.

Fletcher Energy closed up 7c at 785 ahead of the Commerce Commission's decision due on Friday regarding Shell's proposal to buy the Energy division.

Carter Holt Harveyrose 1c to 163. "A quieter day [for CHH] but still reasonable volume going through there, of 1.6 million shares. I think the market overall is still looking for companies that are perceived as undervalued ," Mr Fergusson said.

"It seems to be holding its level around the 160 mark, it's holding up quite well given that we've seen a considerable outflow of funds from New Zealand over the past couple of weeks," he said.

Elsewhere on the market, DB Group was down 10c at 300, Montana lost 8c to 318 and Lion Nathan shed 7c to 487.

AMP lost 15c to $22.51, Sky City shed 7c to 673, Telstra instalment receipts lost 17c to 415, and Fisher and Paykel was down 12c at 698.

Contact lost 3c to 255, The Warehouse shed 4c to 561 and Ports of Auckland was down 9c at 380 after shedding a 9c dividend. INL was down 13c at 330 and Sky TV lost 10c to 340.

On the up side, UnitedNetworks gained 4c to 715; Restaurant Brands, 2c at 110; Richina, 3c at 42; and Tranz Rail, 5c to 380 ahead of its annual meeting in Wellington today.

- NZPA