Speculation Telecom may be preparing to make a $A1 billion ($NZ1.25 billion) play into the Australian 3G market dominated the New Zealand sharemarket this morning.
Telecom is believed to be considering an equity investment in a separate third-generation wireless vehicle that would be spun off from Hutchison Telecommunications, the Australian Financial Review reported today.
Hutchison, which last week forecast that it would need $A1 billion in fresh equity over the next three to five years, has already created a vehicle for the stand-alone entity, Hutchison 3G Australia Holdings, which it registered at the end of last month.
Telecom was trading down 16c at 570 by just after 11am, dragging the benchmark NZSE-40 index down 16.29 points, or 0.79 percent, to 2052.46.
The telco also made up the lion's share of the total market turnover of $29 million, with 1.4 million shares worth $8.4 million changing hands.
JB Were's Peter Stokes said Telecom's weaker tone could be attributed to investors weighing up what could be a substantial strain on the telco's funds.
In other company news, Gisborne-based food processing company Cedenco traded up 8c at 155 after reporting its half-year profit to March 31 rose to $2.39 million from $413,000 the previous half-year period.
The company in which Brierley Investments yesterday finally sold its 48.5 per cent investment to California-based SK Foods, said it saw a 58 per cent rise in its full year profit to $3.8 million.
Air New Zealand shares were virtually unchanged after Australia's competition watchdog said yesterday Qantas' play for Impulse Airlines raised serious questions about long term competition and Qantas rivals Ansett and Virgin Blue both had valid concerns.
Emphasising deliberations were still at an early phase, the Australian Competition and Consumer Commission (ACCC) said any deal to allow Australia's biggest airline to take the discount carrier under its wing would come with conditions attached.
Air NZ A-shares were down 1c at 108 shortly after the market opened, while its B-shares were untraded at 154 .
Shares in Christchurch-based electrical company PDL Holdings jumped 68 percent as France's Schneider Electric Industries SA went on a buying spree at $8 per share.
PDL shares leapt 325c to 800 - a three year high - with 841.629 shares worth $6.73 million changing hands by just after 11am.
Schneider has been involved in a bidding war with Hong Kong-based Gold Peak. An agreed trading halt between the pair ended at 5pm yesterday.
Media group Independent News Ltd and pay-TV operator Sky TV were unchanged after INL announced yesterday it intended to hike its Sky holding from just under half to just over two thirds.
In other movements, Auckland Airport was down 2c at 343, Brierley was down 3c at 55, Rubicon was down 2c at 55, and Frucor slipped another 4c to 166 after yesterday warning profits for the full year would be 35 percent lower than expected.
Falls outnumbered rises by 24 to 22 among the 102 stocks traded.
- NZPA
Telecom dominates market on speculation of $A1bn spend
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