NZ stocks: Carter Holt sends sharemarket down

6.07pm

A worse than expected third quarter result from number two stock Carter Holt Harvey stood out among a number of corporate announcements today, sending the sharemarket down for the second day running.

The wood processor lost 16c to 217 after it announced a third quarter loss of $87 million, down from a $70 million profit for the same period last year.

Carter Holt Harvey said the result was affected by a tax liability of $128 million, relating to the planned sale of 'non-strategic' forests, which it announced today. This amounts to about one third of its total 327,000ha forest assets.

Goldman Sachs JB Were broker Joe Gallagher said Carter's drop was probably reflected disappointment the company was selling only a third of its forests.

"A lot of... the 'divestment bulls' were disappointed by the decision by the company to only sell one-third of the forests," he said.

"You've essentially still got two-thirds of the capital of those forests tied up in underperforming assets," he said.

Carter Holt's fall pulled the benchmark NZSX-50 gross index down 9.52 points to 2805.87, while the NZSX-All capital index fell 0.63 of a point to 932.85.

On a more positive note, resins company Nuplex raced up 22c, or 4.3 per cent, to 530 after a two-day trading halt was lifted today. Nuplex said it had raised $56.6 million in a placement of 11.55 million shares at $4.90 each to institutional investors.

The money, raised in a book build, will partly fund Nuplex's acquisition of Dutch company Akzo Nobel's Coatings Resins business.

Mr Gallagher said the acquisition would give the company a huge increase in geographical spread.

"It's a big buy for the company, but the market obviously trusts management to be able to convert it," he said.

Top stock Telecom rose 3c to 578, as it recovered from its 9c dive yesterday as investors reacted to potential regulatory changes to mobile phone termination charges. The bellwether stock dominated the day's total market turnover of $106.7 million, clocking up trades worth $45.6 million.

Of the 156 stocks traded today there were 51 rises and 52 falls.

On the up was plastics company Vertex Group, which rose 1c to 162. The company said it expects sales growth and operational improvements to lift its half year profit by as much as 15 per cent to $2.5 million.

Steel & Tube fell 3c to 462. Shareholders voted in favour of upping total directors' fees by $80,000 to $310,000 a year at the company's upbeat annual general meeting today.

Tenon gained 2c to 218, ahead of tomorrow's deadline for bids for sawmills throughout the central North Island.

Air New Zealand fell 3c to a 12-month low of 156. After the market closed today the airline announced it was hiking its fuel surcharge in response to rising jet fuel prices.

Other stocks on the move today included: NZX up 5c at 715, Turners Auction down 5c at 450, and Fletcher Building up 4c at 561.

- NZPA