NZ stocks: Telecom fall takes NZ market down

12.15pm

Telecom shares fell 7c to 577 in morning business today as investors responded to the Commerce Commission's draft plan announced yesterday to regulate some mobile phone charges.

Telecom dominated early market turnover with two thirds of the market's $32 million trade. It fell 3c yesterday in initial response to the commission's announcement mid-afternoon.

The benchmark NZSX-50 gross index, in which Telecom has a 26 per cent weighting, was down 16.40 points at 2820.35 at 11.45am. The NZSX-All capital index was off 4.66 points to 935.31.

First NZ Capital broker Malcolm Davie said it was probable retail investors were responding to the announcement as analysts had been expecting it.

"I would be surprised if people were over reacting, as for the most part that has been reflected in analysts' forecasts for some time," Mr Davie said.

He said there would be an impact in Telecom's profit "but it was whether or not that is factored into people's expectations".

Nuplex Holdings remained in a trading halt until it completed an institutional bookbuild, which will be used to fund the proposed purchase of a coatings resin business from Akzo Nobel. Nuplex announced on Friday it had made an offer of around 110 million euros ($203.5 million) for the European company. Prior to the halt Nuplex was trading at 508.

Tower fell 1c to 220 in line with global weakness for the sector.

AXA Asia Pacific fell another 10c to 290 after plunging 38c yesterday. It was also placed in a trading halt yesterday morning ahead of the announcement that the company's French parent was pulling out of a full takeover bid of the Australian-based subsidiary. AXA SA began talks in August last year about acquiring the remaining 48.3 per cent it did not already own in AXA Asia Pacific, but could not come to an agreement on price. AXA SA made an initial offer of A$3.75 ($4.03) per share offer, bumping that up to A$4.05, before withdrawing the bid.

CanWest Mediaworks was unchanged at 172 after dropping 5c yesterday despite announcing a 55 per cent rise in earnings for the year-ended August.

Mr Davie said the result was quite good but it seemed to be a case of buy the rumour and sell the fact.

Carter Holt Harvey was down 2c to 233 ahead of its third quarter result tomorrow. Brokers doubted investors would take many aggressive positions ahead of the result.

Lion Nathan was down 4c to 811 following yesterday's profit downgrade. The Australia-based brewer downgraded its profit forecast for the 2004 financial year by A$42.6 million ($45.8 million) and said it now expects to post a net profit of around A$160 million after significant items when it reports on November 4.

Other movers today included ANZ Bank, down 56c to 2044, GPG, down 4c to 206, Hellaby, up 6c to 611, Michael Hill, up 4c to 734 and Westpac NZ, down 7c to 1858.

There were 30 stocks up and 35 down among the 118 traded in the first few minutes.

In the US, stocks rose as crude oil retreated from record levels, easing worry about the effect of high energy costs on corporate profits.

The Dow Jones industrial average was up 24.56 points at 9,957.94, the Standard & Poor's 500 Index was up 5.84 points at 1,114.04 and the Nasdaq Composite Index up 24.42 points at 1,935.92.

- NZPA