NZ stocks: Telecom's higher dividend sends market up

12.00pm

Enthusiasm about a higher dividend payout by Telecom sent the market heavyweight and the wider market up today.

Telecom shares jumped around in a 9c band between 616-625 in solid trading as analysts attempted to evaluate the quality of Telecom's $754 million June year profit -- 6.3 per cent ahead of last year.

Initially the stock galloped 10c ahead to a three-year high of 626 on news that the company had hiked its quarterly dividend to 9.5cps from 7.5c. But by 11.30am the stock was 7c ahead of yesterday at 623.

The spike sent the benchmark NZSX-50 index to a new high of 2795.72. The NZSX-All index was up 4.24 points at 941.95.

'The reaction has been to the payout ratio," said Campbell Stuart of broker UBS Warburg. "It was slightly better than our expectation."

"You have a payout ratio which is reasonably high, which gives a high gross yield. That in itself looks reasonably attractive relative to other places you can put your money."

The other big positive influence on the index was a 3c rise in Fletcher Building to 490. It was responding to publicity about the amount of work expected in the construction industry and the shortages faced, particularly in Auckland.

Telecom completely dominated turnover with its trade comprising $29m of the total market turnover of $45m.

NZ Refining jumped 100 to 2250 on a small parcel of shares. The stock is at its highest level in seven years and is responding to higher petrol prices and stronger margins.

Exchange operator NZX rose 10c to 835, and gold miner GRD rose 8c to 205.

Casino company Sky City rose 6c to to 482 and Pyne Gould Corp rose 8c to 598. Insurer Tower rose 2c to 195 after yesterday saying it had paid off debt two years ahead of schedule. There was also renewed media speculation about the prospects of it being a takeover target.

Stocks to fall included Auckland Airport, 6c to 701, Lion Nathan, 7c to 760 and Scott Technology, 5c to 329.

There were 39 stocks up and 24 down among the 116 traded.

- NZPA