NZ stocks: Telecom falls on flat day

The sharemarket closed in marginally positive territory yesterday, although market bellwether Telecom fell 3 per cent.

The NZSE-40 index closed up 0.3 per cent.

Telecom, which makes up around 23 per cent of the index, closed down 14c at $4.47 after cornerstone shareholder Verizon Communications (formerly Bell Atlantic) said it planned to further reduce its stake to 19.9 per cent.

That followed its announcement on Wednesday that it had cut its holding to 22.5 per cent from 25 per cent.

ABN Amro broker Nigel Scott said the news could be viewed as both positive and negative for Telecom.

"The market is obviously viewing that as a bit of an overhang, but also as an opportunity because it may entertain another buyer coming along and taking that parcel, providing impetus to Telecom."

Outside of Telecom, several companies posted gains as investors moved to tidy up their portfolios ahead of the end of the quarter.

Auckland International Airport closed up 8c at $3.35 after announcing that passenger numbers were higher than a year ago, despite the terrorist attacks on the United States.

Early indications were that people were getting on with their business and fulfilling their travel commitments, said managing director John Goulter.

Shares in Air New Zealand - Auckland airport's largest airline customer - also continued to gain altitude.

The locally owned A shares added 6c to 40c, while the unrestricted B shares closed up 10c at 40c.

Mr Scott said the stock was attracting retail buyers as fears receded that the ailing carrier might slip into statutory management.

"Air NZ is certainly not out of the woods in any shape or form, it has just had a bit of confidence come back into its share price."

But institutional buyers were still keeping their distance. "They buy stocks on an earnings basis and at the moment Air NZ hasn't got any."

Air NZ's 30 per cent owner Brierley Investments had none of the airline's momentum, ending the day unchanged at 28c. The Singapore-based company reported after the local market's close that it had lost $US119.60 million ($299 million) in the year ended June 30 due to losses linked to Air NZ's writedown of its Australian subsidiary, Ansett.

The investment group reiterated its intention to give up its stake in Air NZ. "Our strategy remains to eventually exit Air NZ, which we do not regard as a core investment.

"However, following the terrorist attacks on the United States, the recapitalisation needs of Air NZ have changed and ... remained under discussion among the stakeholders."

In other movements, Sky City closed up 29c at $10.89, Fisher & Paykel added 22c to $12.05, The Warehouse was up 6c at $5.96, Baycorp added 5c to $10.15 and INL was up 15c at $3.10.

On the downside, Sky TV shed 9c to $3.15, GPG was down a cent at $1.47 and Ports of Auckland lost 6c to $5.12.

Although rises outnumbered falls by 68 to 36 among the 138 stocks traded, the market was not out of the woods yet, Mr Scott said.

"People shouldn't forget that this is a bear market rally, going into the end of the quarter. Globally, there are still significant problems out there."

- NZPA