NZ stocks: Telecom rebound continues to underpin market

12.45pm

Telecom continued to underpin the sharemarket this morning with reports that United States hedge funds which had shorted the stock were scrambling to recover their positions.

Telecom was up 11c to 508 following its 11c rise yesterday, giving the stock a 4.5 per cent boost over the two days.

Macquarie Equities broker David Cleal said an article in the Australian Financial Review today reported that the hedge funds had had to hurriedly cover short positions.

They had taken a punt going short Telecom and long its 21 per cent owner Verizon. It said 8.1 American Depository Receipts, 65 million ordinary shares, had changed hands yesterday.

"That short covering seems to have driven turnover and price this morning," said Mr Cleal.

The NZSE-40 capital index was up 8.36 points to 2090.12 on light volume of $ $26.5 million at 11.30am.

Fletcher Forests was up 1c to 26 after the Independent today reported it looked to have succeeded in its bid for the Central North Island Forestry Partnership (CNI).

Brokers spoken to by NZPA gave credence to the report, although they remain unsure how the deal was structured.

"There are expectations building up that Fletcher Forests is going to be successful with its proposal to buy the Central North Island Forest," Arthur Lim, head of equities at Macquarie Equities New Zealand Ltd said.

Fletcher Forests shares have traded heavily in the last few days in anticipation of the deal.

Its ordinary shares was up a cent at 26 cents by 11.30am, on combined turnover of 6.62 million shares.

Genesis was down 5c to 265. The company today announced the appointment of Benjamim Twombly in its US operation.

Carter Holt Harvey was down 1c to 196, Fisher and Paykel was steady at 1015, Ports of Auckland up 8c at 660, and Restaurant Brands up 5c at 210.

There 36 falls and 31 rises among the 118 stocks traded.

- NZPA