NZ stocks: Tranz Rail and AMP highlights in quiet day

6.00pm

Tranz Rail and AMP shares were the standout performers in an otherwise quiet day on the sharemarket today.

Tranz Rail, after receiving a takeover bid from RailAmerica at 75c on Thursday, was the star performer, climbing 7c to 86 at market's close, up 8.86 per cent on Friday's trading.

It was the highest the shares had been since starting to climb out of a trough spanning most of April and early May.

AMP rose 20c to 590 on rumours that American buyout firm Kohlberg Kravis Roberts (KKR) was leading a £1 billion ($2.8 billion) buyout of the troubled financial services company's British unit.

The top 50 gross index was down 10.47 points to 2009.63 and the top 40 capital index had also fallen 4.70 points to 1981.08.

Today's turnover of $86.8 million was boosted by $13.6 million worth of AMP traded and $6.1 million of Tranz Rail.

Forsyth Barr broker David Price said the Tranz Rail share price indicated "quite clearly" the bid would not succeed in its current form.

"I still think that there's more water to go under the bridge," he told NZPA.

"Tranz Rail have just got to continue on as if it's business as usual for them, so that if something does come up whereby they can strike a sort of deal with the Government or any asset sale, I think they will go ahead and do that.

"What we've seen is the bid has been a catalyst for the re-rating, but what it's actually done is probably bring another player to the party or certainly the Government will refocus on discussions they've had with them," Mr Price said.

Earlier today, JB Were broker Joe Gallagher said the KKR bid was well below his firm's £1.4 billion valuation of AMP's British assets.

He had expected AMP's shares to firm through today's session.

Mr Gallagher said AMP's planned restructure, dividing the British business from the Australasian unit, was probably partly designed to flush out bidders for the British life business.

"The price is always the most important thing. We valued this business at about £1.4 billion so a bid of £1 billion will basically bring back our AMP valuation from about $6 to about $5.50.

"We are still very cautious of this company but after the late rally in Australia on Friday, it looks like it will continue a little bit today."

Telecom accounted for $34.2 million worth of turnover, its share price falling 4c to 488 after its good run over the past six weeks.

"Telecom, on reasonably healthy turnover after its fairly strong run, just pulled back a bit," Mr Price said.

Fletcher Building finished the day 2c down at 337, and BIL International shed 4c to 77.

Fisher & Paykel Healthcare, due to report its half year result on Thursday, fell back 25c to 1070.

There were 42 rises and 37 falls among the 123 stocks traded.

- NZPA