NZ stocks: Cashed up Powerco investors keep sharemarket bubbling

5.59pm


The sharemarket posted another positive session today largely driven by buying interest from cashed up Powerco investors.

After an initially slow start this morning, the benchmark NZSX-50 gross index closed 2.71 points higher at 2860.82, while the NZSX all capital index was up 1.42 points at 950.27.

While the headline index move higher was small, turnover remained firm, Amro Craigs Equities operator Matt Willis said.

"There's no doubt about it, in general terms the volumes are well and truly up for September and look to be for the start of this month as well.

"It still feels like we've got a reasonably buoyant environment for equities."

Total turnover was worth $102.14 million and there were 79 rises and 36 falls among the 163 stocks traded.

Trade in lines company Powerco continued to feature today and the stock ended 4c higher at 212.

Last night the New Plymouth District Council announced it had secured a deal-saving agreement with Australia's Prime Infrastructure, guaranteeing its desired mix of cash and bonds as payment for its Powerco stake.

Meanwhile local minority shareholders continued to sell their Powerco shares to offshore arbitrage funds and the stock was the most traded by volume during the session.

"It's certainly providing some impetus in the market," Mr Willis said.

"I think there's a number of local shareholders who are prepared to take $2.12 today... a better price than $2.15 in a few month's time."

"Of course a lot of that money is getting re-invested back into the market so its helping overall volumes without a shadow of a doubt and has been for a few days now."

Elsewhere, market leader Telecom gained 2c to 601 and was top stock traded by value of turnover at $36.74 million.

Mr Willis said the weakening New Zealand dollar and the company's "compelling dividend story" were creating some renewed offshore interest in the telco.

Auckland International Airport lost 9c to 706, its second day of losses after media reports over the weekend that cabinet was set approve a second international airport for Auckland at Whenuapai.

But Mr Willis didn't give much credence to the reports. "We don't believe the chances (of the new airport going ahead) are any greater today than they were a couple of weeks ago.

"We think all the news in real terms is in the market and it's priced in."

Air New Zealand was in a trading halt all session after Singapore Airlines said it was selling its 6.5 per cent stake in the airline by way of a bookbuild tender. Shares in Air NZ last traded yesterday at 168.

NGC Holdings was up 2c at 309. Indicative bids for NGC are due tomorrow for the 66 per cent stake in the company held by AGL of Australia.

Stock exchange operator NZX was up 5c to 785 after reporting the NZSX's market capitalisation jumped 18.9 per cent in September compared to the year earlier.

Other stocks to move today included: Carter Holt Harvey down 3c to 230, Cavalier Corp down 14c to 485, Contact Energy up 5c to 608, Fletcher Building down 7c to 581, Infratil up 5c to 320, Port of Tauranga down 10c to 575 and Sanford up 6c to 468.

- NZPA