NZ stocks: Telecom, Wrightson buying supports NZ shares

A healthy New Zealand sharemarket was underpinned by strong buying in Telecom and a surprise bid for shares in rural services company Wrightson.

The NZSX-50 gross index closed up a robust 14.36 points, or 0.6 per cent, to 2380.58, while the former benchmark NZSX-40 capital index rose 10.75 points, or 0.49 per cent, to 2204.15, on turnover of $92.9 million.

Rises outnumbered falls by 60 to 49 on 143 stocks traded.

Telecom, which often serves the index's weather vane because of its weighting, traded a heavy 9.3 million shares worth $47.9 million, rising 6c to 516.

Brokers were unsure what had driven the buying but they noted 3 million shares had crossed overnight, indicating overseas buying.

"Where Telecom goes, the NZSX-50 tend to follow," broker Andrew Kelleher of ASB Securities said.

Wrightson commanded a lot of attention, rising 14c to 145 as a buyer emerged at that price for shares. Rural Portfolio Investments (RPI), a Dunedin firm half-owned by former Fonterra boss Craig Norgate, has previously made a play for 19.9 per cent of Wrightson.

Some Wrightson shareholders had approached RPI after the company announced last month that difficult trading conditions could affect its first half profit, ABN Amro Craigs equity dealer Bryon Burke said.

After an ugly profit warning, fast food operator Restaurant Brands surprised the market with better than expected third quarter sales of $67.6 million.

The news pushed the shares up 6c to 113, a reaction to Restaurant Brands' earlier warning that a downturn in KFC sales would probably the group's same store sales by 7.5 per cent on last year.

"I guess that raises the possibility that the problems they are having may not be of a long-term nature," Mr Kelleher saod.

"Basically (Restaurant Brands) confirmed what they released to the market recently but they did confirm that their dividend is going to reamin steady," Forsyth Barr's Suzanne Kinnard said.

Shares in insurer AMP fell 24c to 648 after losing some ground to a trading halt so it could report overwhelmingly shareholder approval for its demerger plans.

Wood products company Carter Holt Harvey gained 4c to 184 on a solid $4.6 million turnover as Citigroup discussed the prospect of the company buying a wood products company in Australia.

"Obviously people will be wondering what will they do with their cash if they sell that tissue business," said Mr Kelleher.

Forestry company Fletcher Challenge Forests (FCF) rose a cent to 133 after the High Court in Auckland said it needed shareholder approval to sell its 106,000 forest estate.

Sky TV regained 13c to 513 after losing 21c since Friday, when media company INL's failed takeover bid closed. INL closed 3c back to 485.

It seemed likely that "regardless of the INL bid, the company is doing well," said one broker.

Among the stocks which went ex-dividend yesterday, Contact Energy rose 5c to 533 as it announced gas price rises in Auckland.

Others on the downside included Hellaby Holdings, off 13c to 490, the Warehouse down 2c to 505, Sky City down 2c to 461, and Sanford up 5c to 510.

Shares on the rise today included: Auckland International Airport up 5c at 690, Michael Hill International up 14c at 484, NZX up 15c at 575, GPG up 1c to 188, BIL up 2c to 65, Hallenstein Glasson down 4c to 281, Ports of Auckland down 5c to 810, and Fisher & Paykel Healthcare down 5c to 1189.

Rail operator Tranz Rail rose 3c to a 13 month high of 151 after news that trading in its first quarter was generally positive.

The New Zealand market followed a strong day on Wall St. The Dow Jones was up 102.59 points to 9965.27, the Standard & Poor's 500 gained 7.78 points to 1069.28, and the Nasdaq Composite Index added 11.03 points to 1948.85.

- NZPA