NZ stocks: Telecom, Sky TV do most damage

The sharemarket fell almost one per cent yesterday, led down by Telecom, Sky TV and the airlines.

The benchmark NZSE-40 index closed down 18 points, or 0.9 per cent, at 2034 on turnover worth $661 million.

JB Were's Peter Stokes said the market weakness was due largely to INL's purchase of a large parcel of Sky TV shares overnight.

The media company picked up 23.45 million shares - or 6 per cent - of Sky Network Television at $3.75 each, brokers said.

Sky TV shares closed down 26c, or 7 per cent, at $3.49, after losing 20c to $3.55 immediately after the transaction, while INL closed down 7c at $3.61.

Mr Stokes said Sky's slump was a natural reaction to such a large placement.

"You often see that knee-jerk reaction where the stock trades just a little bit softer the following day from where those shares were placed overnight," he said.

A total of 24 million Sky TV shares changed hands yesterday, worth $88.6 million.

Telecom, which owns 12.2 per cent of Sky, closed down 14c, or 2.5 per cent, at $5.49. It made up the lion's share of market turnover at $526 million. The telco's recent share placement also continued to weigh heavily on its share price, dealers said.

Falls outnumbered rises by 63 to 39.

The market calmed somewhat towards Air New Zealand yesterday, with investors realising there were an awful lot of hurdles yet before minority shareholders stood to benefit from any sale to Qantas, brokers said.

"The landscape is changing almost daily with that sector so the market has been sort of digesting what has happened in the last 24 hours and what all that meant," Mr Stokes said.

The airline's resident-only A shares closed down 3c at $1.06, while its unrestricted B shares fell 6c to $1.45.

On Tuesday Qantas - in a deal described by many as merely a Brierley Investments' exit strategy - said it wanted to buy Brierley's 30 per cent stake in Air NZ and Singapore Airlines' 25 per cent holding.

It would then on-sell Air NZ's Ansett Australia and Ansett International to Singapore Airlines.

In other movements Vending Technologies rose 1c to $3.25 after announcing a net profit for the March year of $4.03 million, or 24c a share, up from $3.1 million in the prospectus, and from the previous year's $798,000.

The company, which listed in November, has seen its value rise from an initial offer price of $1.00 a share to a high in February of $3.45.

Meat processor Richmond rose 10c to $2.85 after a Stock Exchange Market Surveillance panel ruled against a claim by Richmond that rival South Island company PPCS should be classified as an insider after an internal memo was leaked to the company.

PPCS holds 16.75 per cent of Richmond and has announced its desire to increase that stake to 60 per cent.

After the market's close Invercargill-based North Meats emerged as another bidder for the Hawkes Bay processor, giving notice that it may seek up to 60 per cent of Richmond, or 24.59 million shares, for between $2.70 and $3.24 a share.

The Warehouse closed down 2c at $5.52. Contact Energy, which late yesterday confirmed the appointment of Stephen Barrett as chief executive, lost 2c to $2.84.

Sky City closed up 1c at $9.85, NZ Refining lost 10c to $15.90 and Frucor shed 5c to $1.60.

Brierley Investments was up 2c at 63c, Telstra added 3c to $8.03 and Lion Nathan continued to strengthen after its good result, closing up 10c at $5.15.

AQL Holdings (Aquaria), in response to a Stock Exchange query about its 120 per cent share price rise and heavier than normal volume of trading since March 17, said it was in confidential negotiations to buy an unnamed business. It closed down 0.2c at 2.8c.

- NZPA