NZ stocks: Telecom trading props up market

The sharemarket closed flat yesterday, despite some large Telecom orders.

Telecom's turnover of 10.90 million, valued at $63.25 million, constituted about one-third of total turnover - 33.81 million stocks valued at $109.72 million.

The NZSE-40 capital index closed down 0.3 points, or 0.01 per cent, at 2073.65 while the NZSE-SCI capital index gained 18.98 points to 5448.38.

Cameron Stewart of ABN Amro said the day's overall trade would have been negative without the contribution from Telecom, which closed up 13c at $5.80.

"There was good volume through Telecom - just a very, very nice large buy order by one broker pushed the stock up. I think it got sold down a bit too much last week," Mr Stewart said.

"It's coming back to more reasonable levels after that [$500 million] placement. The last week ... it's been great trading in Telecom, very heavy offers and bids. Also there's been a seller hanging over the market for the last three weeks, and that selling dried up on Thursday afternoon so the stock managed to jump."

Australian telco Telstra gained 8c to $8.20.

Casino operator Sky City jumped 22c to $10.20 on rumours that the shares would be split, creating more liquidity.

Fisher & Paykel rose 20c to close at $10.80 as interest continued in the appliance and healthcare stock, following a strong March year result and the release of a few more details on the separation between the two divisions.

Natural Gas Corp fell severely - losing 15c to $1.03 - after announcing that as a result of an unforecast increase in wholesale electricity prices to "unprecedented levels" since late May, it was unlikely it would post a profit in the half-year to June 30.

"They're highly exposed at the moment to the [wholesale] pool prices in electricity, the [southern] lake levels are starting to drop, there's been no rain and it's been very cold," Mr Stewart said.

"The weather conditions are playing havoc with those electricity retailers who are short at this stage.

"It may be an overreaction to what's going on - although they may be losing a bit with these high pool prices, the value of the company if they did a corporate restructuring would be a lot higher than it is now."

Contact Energy, up 3c at $2.90, was not hit in the same way because, as an electricity generator as well as a retailer, it could better hedge its position.

"They are suffering but not to the same degree, they don't have the same high level of exposure that NGC does," Mr Stewart said.

The Warehouse closed down 19c to $5.70 after index-related buying recently distorted the share price.

* The New Zealand dollar firmed yesterday.

One dealer said the kiwi was being held up by the aussie after good Australian growth data and the Reserve Bank of Australia's abstaining from cutting interest rates.

- NZPA