Carter Holt confirms Australia listing

12.20pm

Carter Holt Harvey, which has been enjoying a return to popularity on the sharemarket as foreign investors buy, today confirmed today it would seek a primary listing in Australia.

Big volumes of Carter Holt shares traded yesterday, sending the share price up to a fresh two-year high to $2.08, before closing at $2.07. Today, the price firmed back against to $2.08 on further good volume.

More than nine million shares worth nearly $19 million changed hands yesterday and a further 5.4 million changed hands again today.

Carter Holt, 51 per cent owned by the world's biggest paper company, International Paper of the United States, said it would apply to convert its Australian Stock Exchange (ASX) foreign exempt listing to a full ASX listing.

The move has been forced on to New Zealand companies by the ASX which reset the asset hurdles so high that no company could list under the foreign exempt rules.

Chief executive officer Chris Liddell said the move reflected the company's growing strength in Australia.

"From a standing start we now have the largest market share in Australia in virtually every one of our core businesses. With more than 35 per cent of our staff and over 40 per cent of our sales coming from the Australian market it is appropriate we move to a full ASX listing."

The company will retain its primary listing in New Zealand. It expects to move to a full ASX listing before July 1.

Carter Holt's share price has risen 10 per cent over the last week, and nine cents this week.

This week's finalisation of the company's cost-cutting measures at the Kinleith pulp and paper mill was greeted positively by the market.

But brokers and analysts said Carter Holt Harvey was also benefiting from an upswing in optimism about cyclical stocks.

"There's obvious offshore interest," said Alan Wills, a broker with Forsyth Barr Frater Williams.

Pulp prices were definitely on the rise, said ABN Amro forestry analyst Dennis Lee.

"Kinleith had some impact but in the short term, the recovery in the pulp market is the major factor."

Pulp prices had risen by $20 to $30 in May and another $10 to $20 increase was possible in June, taking the price to $500 per metric tonne.

"They're talking about two increases in two months," he said, although pulp prices were admittedly coming off a low base.

Another key factor today was a report that the company was sitting on unrealised forex gains of $200 million. Today's Independent newspaper said CHH had confirmed the company's favourable position as a result of a hedging contract.

Mr Wills said it was also possible Carter Holt's managing director Chris Liddell had drummed up fresh interest after giving a talk to a Credit Lyonnais conference in Hong Kong last week.

Today's sharemarket was driven by price surges in several blue-chip stocks, including another cyclical Fletcher Building, as international interest picked up pace.

"We're certainly seeing some good buying interest in the New Zealand market -- maybe it's the currency, which is still looking strong," said Forsyth Barr broker Suzanne Kinnaird.

- NZPA