Market report: Montana hogs the limelight

Winemaker Montana dominated the sharemarket again yesterday as brewing giant Lion Nathan appeared to gain the upper hand in negotiating a controlling stake in the company .

Trading in Montana shares was suspended to give investors time to consider the competing bids of Lion and British liquor giant Allied Domecq.

But Lion effectively sidestepped the trading barrier, using the recess to bump its stake to 46.46 per cent from 28 per cent in an offmarket deal.

This leaves a tiny 4.5 per cent remaining to be snapped up on-market when trading resumes.

Total market turnover was 63 million shares worth $260.83 million. Montana made up the bulk of this, with 39 million shares worth $181.54 million changing hands in the offmarket deal.

The key NZSE-40 capital index closed up 6.74 points at 2007.83, while the NZSE-10 was up 3.90 points at 884.34.

Montana shares sprinted as high as $4.75 on Thursday on the back of the Lion offer, closing up 63c at $4.67 on heavy volume. But analysts expect the stock to slump back to its previous $3.80 to $4 level once trading resumes on Monday, with investors seeing the Lion buy as a "done deal."

Lion Nathan closed down 10c at $4.80.

With all eyes on Montana, the rest of the market had a fairly quiet day.

Telecom closed up 10c at $5.45. Deutsche Securities dealer Shane Gavegan said the stock's positive tone was unusual, given events in Australia yesterday.

Vodafone Pacific said it might sell about a million cellphone customers to rival Hutchison Telecommunications in order to get around regulatory shackles in its bid for Australian telco C&W Optus - a move that could stymie Telecom's own bid for the company.

Air New Zealand A shares were up 5c at $1.67 and the Bs rose 7c to $2.22.

The airline, under new chief executive Gary Toomey, said November revenue rose 5.8 per cent, but patronage was down 0.1 per cent.

The Warehouse announced higher-than-expected second quarter sales and its share price climbed to $5.75 before closing up 11c at $5.60.

Fletcher Energy closed down 12c at $8.93 after a poor performance overnight by US asset Capstone Turbines, which closed at $US34.36.

Among the other Fletcher stocks, Building was down 3c at $2.08 and Forests was up 1c at 31c. The New Zealand dollar lost ground overnight Thursday in line with aussie and euro weakness and while it closed around yesterday's highs, the short-term outlook is negative.

"There was a lot of selling pressure overnight on the back of both the euro and the aussie, and also a continuation of the institutional investor selling that we've seen over the last couple of days," said a currency dealer.

However, New Zealand dollar yields support the currency at present as locals pick that the Reserve Bank will delay easing interest rates, particularly given yesterday's sound employment data.

- NZPA