KEY POINTS:
When Telecom delivers its half-year results tomorrow - expected to be a 25 per cent drop on the same period last year - it will be the first heavyweight stock to report since the sharemarket turmoil at the start of January.
With the valuations for New Zealand equities still fragile because of the sentiment in overseas markets, investors will be watching closely for signs of financial weakness.
Given the size of New Zealand's biggest publicly listed company - accounting for about 16 per cent of the market capitalisation of the NZX-50 - any change in its value will have an effect on the value of indexes.
That in turn will affect the entire market.
Stockbroker Ian Waddell said the Telecom results and others in the reporting season would provide a view on the fundamentals of New Zealand businesses.
"A lot of stocks have been beaten up unfairly and there is interest in the results because they allow us to see what is actually happening in companies," he said.
Macquarie Equities New Zealand investment director Arthur Lim said that Telecom was such a big player in the market that its financial results were always closely examined.
But given the state of the markets the Telecom results would face additional scrutiny this week, Lim said.
He said that for overseas investors, in particular, exposure to Telecom had been seen as exposure to the New Zealand market as a whole.
That was less the case now than it had been in the past, he said.
The half-yearly report tomorrow will be the first and last interim report by chief executive Paul Reynolds, under the structure he inherited when he replaced Theresa Gattung in September.
Separation of the company into three business units - retail, wholesale and network divisions - is still under negotiation but is set to come into force on March 31.
Sharemarket analysts expect Reynolds' address tomorrow to focus on the operational performance that produced the results rather than the effect of the split or any long-term planning.
"That is our expectation - and that the larger strategic issues will be dealt with when he meets investors in April," said Greg Main, telecommunications analyst for First New Zealand Capital.
He said it was probably still too early for Reynolds too be able to provide such information.
Analysts said they would be looking for details of the $1.4 billion in capital expenditure for developing broadband.
REPORTING SEASON
Half-year results
* Vector 14/02/2008
* Tourism Holdings 19/02/2008
* PGG Wrightson 19/02/2008
* Pumpkin Patch 20/02/2008
* Auckland Airport 21/02/2008
* Contact Energy 22/02/2008
* Sky City 25/02/2008
* Air New Zealand 29/02/2008
