NZ stocks: War appears to fuel high turnover

The New Zealand sharemarket remained relatively unmoved by the first attacks on Iraq, but turnover was high - a sign that New Zealand might be becoming a "safe haven" for overseas cash.

Turnover was a solid $123.5 million, the third consecutive session with volumes above $100 million.

But the indexes were little changed by the onset of war - the benchmark NZ50 gross index rose 6.21 points or 0.33 per cent to 1902.07 , and the older NZSE-40 capital index rose 2.98 points to 1884.85.

The rise here was muted compared to strong rises again in London - up for the fifth day running - and Wall St, which had its sixth straight up day, as uncertainty over war prospects cleared.

Here, the war seemed to fuel a high turnover in leader stocks, and it appeared that portfolio trading by institutions was the main source.

"I think there's some fresh money coming into the market," Forsyth Barr Frater Williams broker Alan Wills said. "It could be a safe haven-type approach - people wanting to be in equities and seeing our market as being a relatively safe place."

He said prices changes had been slight in most cases because there had been enough stock to meet demand.

But Macquarie Equities investment advisor Arthur Lim said the turnover could equally have been fuelled by offshore investors taking their money out of the country, and that prices were holding up through the influence of strong offshore markets.

Market leader Telecom rose 5c to 426 on turnover worth $38.2 million.

Today, the market was informed that Deutsche Bank in Australia had bought just over 5 per cent of Telecom from US shareholder Capital Group over the last week. That might have cleared an overhang in the stock, brokers noted.

Casino operator Sky City Entertainment was the next busiest stock, falling 9c to 823 on $16 million worth of shares. The stock has lost 6 per cent in the last two days after news that tough anti-smoking legislation in public places was likely to succeed.

Other big traders were Carter Holt Harvey (up a cent to 175), Fletcher Forest preference shares (up a cent to 101), the Warehouse (up 10c to 580), Fletcher Building (down a cent to 355) and Sky TV, (up 5c to 360).

Contact Energy was steady at 450 on $8 million worth of shares. It later reassured investors that it believed it had sufficient gas for its plants to cover the closure of two stations for maintenance.

The war appeared to have some impact on tourism-affected stocks Air New Zealand and Auckland Airport . The airport fell 3c to 527 on solid volume, and the mostly Government-owned airline eased a cent to 50 after revealing softer bookings because of the war and the Asian "flu" alert. However, Mr Wills said it was also expected to benefit from falling oil prices.

In other corporate news, utilities investor Infratil was steady at 155, a cent off its year low. Infratil - which owns stakes in Wellington International Airport and Trustpower - announced after the market closed that it would launch a share buy-back of up to 9 million shares, and expected annual core earnings of $54 million compared with $40.6 million a year ago.

Meanwhile, hydro-electricity company Trustpower ended 6c down at 395 before announcing a two-for-seven share buy-back offer at $3.70 per share.

Steel and Tube lost a cent to 313 on light turnover after announcing its previously flagged bid for Hurricane Wire had been successful.

Meat company Richmond rose a cent to 313 after news that it was still on track for a forecast full year pre-tax profit in excess of $22 million.

GRD MacRaes, which said it may have found a big new underground gold mine west of Motueka, rose 5c to 110. GRD said the find, if proved, would take years to develop.

There were 45 falls and 37 rises among the 126 stocks traded.

- NZPA