NZ stocks: F&P fuels active trading

An interest rate cut, the debut of a split Fisher & Paykel and an improvement in Telecom's performance boosted the sharemarket yesterday.

"There's been quite good flow in the market, it's been active and don't think there'll be too many complaints today," said a UBS Warburg broker.

Within a couple of hours of trading, stocks had risen across the board in response to the Reserve Bank's widely anticipated decision to cut the official cash rate from 5.25 per cent to 4.75.

That saw the NZSE-40 index rise nine points by 11 am, but by the close of the day it was down 0.39 points to 2009.69.

Nevertheless, turnover was a strong $122.3 million of shares.

Trade was dominated by the relisting of a split Fisher & Paykel, the two new companies accounting for nearly a third of the turnover.

Fisher & Paykel floated 18 per cent of its healthcare unit on the Nasdaq in the United States, where the American Depositary Shares (ADS) closed at $US22.95 - a 27.5 per cent gain on their issue price of $US18 per ADS.

Fisher & and Paykel's healthcare division opened here at $14.10 and closed at $15.21. The companion appliance company listed at $9.00 and closed at $9.60.

"It was an excellent debut," Macquarie Equities senior investment adviser Arthur Lim said.

He said the closing prices, along with the cash payment of $697 received for every 1000 shares in the former Fisher & Paykel Group, was equivalent to around $14.00 compared to the $13.50 level that F&P Group shares closed at on Friday.

But he said the new appliance entity was trading below Macquarie's fair value level of $11.30 although that was expected given that arbitragers seeking the healthcare exposure would want to offload the appliance shares in the short term.

"The appliances stock is going to have to do some work to absorb that selling. So I think we might see it at this kind of level for a while yet."

Telecom also enjoyed a strong day's trading, with $21.3 million of shares changing hands. The company's price eased 5c to $4.84 after bouncing 29c to two-month highs on Tuesday, when the telco reported flat but solid first quarter net profits.

Fletcher Building was steady at $2.72 after chairman Roderick Deane on Tuesday expressed confidence the company's earnings for the six months to December 31 would be substantially higher than those for the previous corresponding period.

"Low interest rates are very good for Fletcher Building," said Forsyth Barr Frater Williams broker Alan Wills. "Intrinsically the business is worth more than where it is trading at the moment."

Other stocks to gain ground included Carter Holt Harvey up 7c at $1.55, Cavalier up 10c to $5.70, DB Group up 30c at $6.00, Kirkcaldies up 20c to $5.20, Port of Tauranga up 10c to $7.00, and Sky City up 5c at $12.35.

Infratil rose 2c to $1.68 after lifting its interim profit by 72 per cent on Tuesday and signalling an intent to widen its investment strategy.

* The kiwi's feathers were unruffled yesterday after the Reserve Bank cut the official cash rate to 4.75 per cent, swiping off 50 points.

At 5 pm, the kiwi was at 42.18USc.

- NZPA