NZ stocks: Contact bid flows into top stocks

A higher bid price for Contact Energy flowed through to other "quality" stocks, sending the NZSE-40 index up 0.9 per cent yesterday.

News that Edison Mission had increased its bid for Contact Energy by 10 per cent to $4.25 a share was not unexpected, but helped buoy the overall market.

Contact's shares hit a new high of $4.19 and closed up 5c at $4.17. A total of 1.6 million shares, worth $6.6 million, were traded.

The new offer, at the middle of the Grant Samuel valuation and the lower end of the Cameron & Co valuation, was recommended by the independent directors.

But brokers said it sounded as though institutions would hang in for a higher price.

"It's a major stock and will have to be dragged off the institutions," ABN Amro broker John McMahon said. "The general feeling is that the offer is still a little bit light."

He said quality stocks were in short supply. Contact made up 6 per cent of the market, and its disappearance would cause a major rearrangement of portfolios.

The Warehouse, up 15c to $6.70, Sky City, up 19c to $12.55 and Auckland Airport, up 12c to $3.60, all benefited.

The NZSE-40 Index closed 16.81 points up on 1981.64 on good volume of $105 million. The top 10 index rose 11.60 points to 881.63 and the small stocks index gained 25.34 points to 5513.77.

Fisher & Paykel, the market's other hot stock hit a record high of $14.90.

Trade was heavy and 1.3 million shares, worth $19.5 million, were sold ahead of next Friday's split. They slipped to $14.80, up 27c on Thursday's close, after the company announced its half-year net profit of $37.5 million - slightly down on expectations.

Brokers wondered if F&P's strong performance in the American appliance market could be sustained after the contraction of the US durable goods market.

Frucor was traded well, with sales of 3.3 million shares, worth $7.9 million. It closed 1c up at $2.43, well above Danone's $2.35 takeover offer.

The price of another takeover target, Pacific Retail rose 20c to $2.00, well above the $1.76 price Eric Watson's Cullen Investments is offering. Broking house Macquarie was an active buyer.

Sales in market leader Telecom were worth $22 million. The stock rose 2c to $4.62, continuing its recovery from its low of $4.13, hit last week.

Westpac NZ climbed 20c to $16.40 after the company produced a strong year profit. ANZ Bank rose 40c to $22.00.

Goodman Fielder fell 8c to $1.65 after the resignation of its chairman, Jon Peterson.

Nuplex fell 1c to $2.84, despite telling shareholders yesterday the results for the first three months of this year were on budget and were forecast to continue at this rate.

The stock fell sharply this week when cornerstone shareholder Shamrock quit the company.

Blis rose 9c to 89c, and NZ Refining rose 19c to $16.20.

Fletcher Building closed up 2c at $2.70, and Carter Holt Harvey was unchanged on 144.

- NZPA