NZ stocks: Carter Holt saves flat day

Carter Holt Harvey's great run since posting its result on Tuesday continued, helping to lift an otherwise flat sharemarket into the positive yesterday.

Carter Holt Harvey gained 9c to 199 and has now surged 13 per cent ahead since posting its better than expected $25 million December quarter profit.

Brokers applauded CHH's ability to eke out a profit in an adverse environment, with all divisions performing better than in the September quarter.

The close was CHH's best since March and was just 2c below a 19-month high.

Telecom took a breather after gaining 2.25 per cent yesterday, but brokers said it still looked good. It closed 2c easier at 539.

The NZSE-40 index did not stray too far from square through the session and ended 4.28 points ahead at a new eight-month high of 2123.63.

Salomon Smith Barney broker Craig Robins said investors were chasing listed global cyclical stocks such as Carter Holt to catch the world recovery. Institutions were generally underweight in such stocks.

"It's certainly attracting a bit of attention. It looks as if it's really broken out. Last year's underperformer has become this year's performer," he said, adding that Telecom was on people's radar screens as well.

He said the market in Australia and New Zealand was being driven by cyclical and under-owned stocks as Carter Holt was the obvious contender.

"If the world is going to turn around, Carter Holt has a lot of leverage."

One of last year's better performers, Fisher & Paykel Healthcare had a poor day, dropping 45c to $15.55 as concerns about profits in the sector mounted. The US market was spooked by disappointing earning by Healthcare competitor, Respironics. Another competitor, Resmed, dropped heavily in the Australian market.

F&P Appliances fell 20c to $10.10.

Nearly 1.5 million Lion Nathan shares worth nearly $9 million traded yesterday. Brokers said investors were unfazed by the poor summer affecting beer sales.

Mr Robins said Lion has good earnings growth and was still seen as cheap. It closed 5c ahead at $5.92.

There was again strong offmarket trading in other big leading Australian stocks trades including AMP, up 14c at $23.41, Telstra, down 2c at $6.68, Axa, down 6c at $3.54, and BHP, unchanged at $4.62.

Scott Technology, which yesterday announced it had won orders totalling more than $12 million to build two whiteware production lines for manufacturers in the United States and Mexico, rose 15c to $1.70.

Software of Excellence, which yesterday said it was on track to meet profit targets, continued its excellent run, rising 14c to $3.30.

Briscoe, which will replace Frucor in the top 40 index, rose 4c to $1.73. Others to move included Nuplex, up 19c to $3.39.

There were 40 rises and 53 falls among the 141 stocks traded. There were also rises on the NZSE-10 capital index, up 2.36 points to 964.19, and the NZSCI capital index, up 4.09 per cent to 5861.43.

The New Zealand dollar remained pegged in a narrow five-point range yesterday, as investors tuned their radars to Japan's economic woes.

At 5 pm the kiwi was at US42.72c, well up on Thursday's US42.58c close.

"Volumes have been very light with not a lot of interest in the market," Deutsche Bank dealer Tim Robinson said. "You've got Australia Day and Auckland Anniversary on Monday and a lot of people are in long weekend mode."

Investors were beginning to weigh up the effect Japan's recession could have on the Australasian growth currencies.

"Japan looks like it is going to be the topic of 2002. It is basically a Japan risk story. People are saying 'is Japan going to blow up?'," Mr Robinson said.

Those fears were delivering a double-whammy to the Japanese forex market of a weakening yen and a bond sell-off.

"My thoughts are that people are getting out of Japan and I don't think it's a positive for Asia if that is the case."

The kiwi rallied to 57.61 yen.

- NZPA