NZ stocks: Telecom news drag on market

The New Zealand sharemarket fell three-quarters of a per cent yesterday, largely because Telecom lost ground when it confirmed it was canning the introduction of mobile phone technology in Australia.

The NZSE-40 capital index ended down 15.63 points at 2090.72 while smaller stocks rallied well, with the NZSE-SCI capital index gaining 43.21 points to 5163.83.

Total turnover of 37.35 million shares was worth $91.38 million, with Telecom and Lion Nathan each accounting for $14 million and Carter Holt $9.07 million. Rises outnumbered falls 45 to 41 among the 142 traded.

JB Were's David Cleal said the market seemed solid but volumes had not been strong lately.

"The feature of the day was the weakness in Telecom," Mr Cleal said of local trade.

That company - down 3 per cent after a good run - had confirmed its Code Division Multiple Access plan with Lucent Technologies had been dropped after Australian subsidiary AAPT had spent more than $A125 million ($156 million).



Mr Cleal said the move had been anticipated by the market and contractual penalties should not be too great given Telecom has an ongoing relationship with Lucent, so the 20c fall to $6.20 was probably an overreaction.



Contact Energy posted its March half-year profit today, booking $35.65 million, down from $38.2 million.



The utility lifted its dividend to a fully imputed 5.5c per share from 5c, payable on May 25.

Contact shares, which have seen buying since cornerstone shareholder Edison Mission announced last Friday it wanted to take its holding up from just over 40 per cent to 51 per cent, closed a cent higher at $2.96.

Mr Rattray said the big issue for Contact was how Edison was going to buy the 48 million shares it is seeking from May 21. It was thought that Edison would not have to pay anywhere near the top of the range of the $2.90-$3.25c a share indicated price range. The consensus was that it would pay $3.10-$3.15.

Bio-technology company Rubicon was up 3c at 52 after it was revealed on Wednesday that private New York-based fund manager Perry Capital had taken a 10 per cent stake.

Carpet maker Cavalier, which rose ahead of yesterday's $25 million capital repayment announcement, climbed another 13c to $5.28 on light volume.

Fisher and Paykel continued its firmness, rising 20c to $8.90.

Air NZ, beset by competition worries, had a relatively quiet day, firming a cent to $1.13 in the A shares and adding 2c to $1.60 in the Bs.

AMP Office firmed 1c to 83c on high turnover.

Auckland Airport fell 3c to $3.44, Baycorp rose 19c to $12.59, Brierley Investments gained 2c to 60, Eventures rose 6c to 29, Fletcher Building lost 3c to $2.30, INL put on 5c to $3.60, Lion Nathan fell 3c to $5.05, Telstra dropped 7c to $8.18, Carter Holt was steady on $1.84, and Tourism Holdings gave up 2c to $1.41.

- NZPA