NZ stocks: Telecom rescued from four-year low

Investors returned to Telecom yesterday after it fell below $6 in the morning to hit its lowest price - $5.94 - since June 1996.

Telecom's fortunes improved in the afternoon with a high volume of shares traded - 9.56 million, valued at $57.35 million. It finished the day at 605, up 1c from yesterday.

"I think when people saw Telecom trading below $6 they thought it had got too cheap," Richard Leggat of Merrill Lynch said.

Telecom eventually made up more than half the total market turnover of $116.58 million, on 32.24 million shares traded. "That was reasonably encouraging, and the volume was the best we've seen in a long time."

The NZSE-40 Capital Index was fairly steady, falling 0.61 of a point (0.03 per cent) to 2012.18. Falls outnumbered rises by 58 to 44 during solid trading.

There was continuing support for Montana and Lion Nathan, both up 10c at 295 and 490 respectively, on the back of news that Montana had bought Corbans Wines.

Fletcher Building also continued its rise after rumours that a bidder had put an offer on the table of 285 a share. Building, which has a market capitalisation of around $800 million and is seen as the least likely Fletcher asset to attract a bidder, has been ambling up in price over the last few days to close up 8c at 250. Fletcher Energy rose 11c to 900 as oil prices continue to rise, but NZ Refining eased 10c to $11.20 and Natural Gas fell 7c to 137.

"International investors, bar Telecom, are wary of our market because of the continued slippage of the currency," Mr Leggat said.

"The market was reasonably solid, the tone was still a little mixed but slightly better than it has been."

Warehouse shares fell 15c to 575 on light volumes, as did Sanford (down 10c at 430) and Sky City (down 9c at 430). Commsoft fell 10c to 160, and Telstra receipts were down 15c at 400. Baycorp lost 7c to $11.65 but still had a turnover of $4.13 million.

On a more positive note, Tasman Agriculture jumped 12c to 138 and Renaissance rose 10c to 125.

- NZPA