NZ stocks: Warehouse stars in solid trade

The sharemarket continued to hold its ground against markets overseas, with discount retailer The Warehouse the star performer yesterday.

The key NZSE-40 capital index ended up 2.45 points, or 0.12 per cent, at 2075.51 while the NZSE-SCI capital index was down 20.43 points, or 0.38 per cent at 5288.14.

Turnover of 22.60 million, valued at $84.38 million, was topped by Telecom with 4.41 million stocks valued at $25.78 million.

The Warehouse, which closed up 20c at $5.85, produced a "solid" first-half result of $51.96 million, David Cleal of JB Were said.

The result was up 3.54 per cent on the same time last year and slightly bettered analysts' forecasts of $49 million to $50 million.

Mr Cleal said he would not change his recommendation of "accumulate" on the stock, although The Warehouse was likely to trade at a discount for the short term given the poor retail environment.

Telecom closed down 3c at $5.85.

"It was a pretty good performance from Telecom on a day when you might have expected a bit more weakness in the market. Telecom was reasonably well bid," Mr Cleal said.

Australian telco Cable & Wireless Optus started assessing final offers for its assets yesterday as Singapore Telecommunications raised the stakes in the race for the telco.

Telecom has refused to comment on its bid for the mobile assets, but said it continued to look at a range of opportunities for expansion in Australia. Rival bidder Vodafone Pacific has also confirmed it reaffirmed its interest ahead of Friday's deadline.

C&W Optus shares jumped 5 per cent yesterday morning on reports SingTel's revised offer valued the company at more than $A17 billion ($20.85 billion), or $A4.60 per share.

Fletcher Energy was down 3c at $9.49, Forests gained 1c to 34c and Building shed 1c to $2.06.

"There still seems to be some ongoing interest in Building, and it is a cyclical stock and probably the feeling in the market is ... that it can only get better," Mr Cleal said.

Building will be removed from the NZSE top-10 but remain in the top-40 index.

Office furniture maker turned investment company Damba Holdings revealed itself as last week's mystery bidder for an 11 per cent stake in struggling online cosmetic retailer Beauty Direct. The company bought 3.1 million shares through broking house DF Mainland on Friday at 8.5cps. Beauty Direct was unchanged from Friday's closing price of 9c, and Damba was up 2c at 42c.

Elsewhere, casino operator Sky City, under managing director Evan Davies, rose 15c to a record high of $9.68, Tranz Rail gained 8c to $4.28, Telstra was up 5c at $7.95, Air NZ A was up 1c at $1.42 and Air NZ B gained 5c to $1.83.

Advantage Group lost 5c to $1.13, Genesis shed 20c to $4.20 and Richmond was down 3c at $2.48.

- NZPA