NZ stocks: Telecom rebounds, Energy hits record

Telecom and Fletcher Challenge Energy drove New Zealand's key share index up 1.75 per cent yesterday, and signs of stability in the currency as it regroups after last week's record lows also helped.

The NZSE-40 capital index ended up 35.97 points at 2093.74.

Biggest stock Telecom surged away from last week's 3 1/2 year low, rising 40c to 682.

Telecom was up after a news report that Singapore Telecommunications was interested in taking a cornerstone shareholding.

"Telecom has been beaten down of late and the market has been looking for reasons to let it go higher again," Cavill White Securities' Alan Wills said. The story was very credible because Telecom is in expansion mode and may want fresh capital.

Fletcher Energy jumped 33c to 835 after its billion-dollar, 11 per cent stake in California-based Capstone Turbine Corporation surged in value again. Also, talk of Fletcher Energy's future ownership continued to underpin the stock as it rose to its highest ever close.

Reuters reported Fletcher Energy was expected to post a sharp jump in full-year profit tomorrow, buoyed by increased oil and gas production, high world oil prices and the sale of its stake in Natural Gas Corporation - which should result in a net abnormal gain of $100 million. The average expectation is for net tax paid profit in the year to June of around $230 million, compared with $55 million.

Mr Wills said a steadier currency, which last week plunged to a new record low at 42.35USc, was positive. Overseas share investors worry about exchange rate risk when a currency is volatile because while they may buy bargains they can easily lose any gains when reconverting to their home currency.

Mr Wills said the key to the sharemarket at the moment was a stable dollar.

However, a currency dealer indicated the dollar's recovery may prove to be merely a pause as the kiwi's fundamentals were still as bad as they were last week.

Total turnover was worth $192.55 million, Telecom accounting for $99.68 million, Fletcher Energy $10.37 million and casino operator Sky City $17.15 million.

Mr Wills said it did not appear the volume of trading in Sky City was particularly noteworthy, although just one buyer was responsible for the bulk of it. Sky City lost 2c to 755.

Smaller stocks were flat, the NZSE-SCI capital index easing just 1.01 of a point to 5407.46.

Rising stocks outnumbered falls 59 to 48 among the 154 traded.

Air NZ, due to announce annual results this morning, was firmer, the domestic A shares gaining 2c to 174 and the foreign Bs 5c to 230.

Carter Holt Harvey was up 2c at 180 and also in the forestry sector Fletcher Forests, which will announce annual results along with Building and Energy tomorrow, firmed 1c to 89.

Contact Energy eased 2c to 251, Auckland Airport and INL firmed 1c to 295 and 378 respectively. Sky TV rose 2c to 380 and Lion Nathan gained 3c to 473.

Outside the leaders, Advantage was up 4c at 270, Baycorp gained 5c to $13.10, Frucor slipped 6c to 213, GDC jumped 20c to 470, GPG was up 4c at 145, Montana rose 5c to 250, and Port of Tauranga, after last week's result, surged 20c to 550.

- NZPA