NZ stocks: Contact, Frucor lead market higher

12.30 pm

Further resistance by Frucor and Contact investors to takeover bids along with some recovery by Telecom helped underpin the sharemarket in morning business today.

Contact Energy pushed up 4c to a new record of 406 today, now well north of Edison Mission's bid price of 385. Brokers said a decision by Genesis Energy to put power prices up plus its talk about the high cost of building new power plants encouraged investors to drive Contact up.

Frucor, the subject of a takeover $294 million offer yesterday at 235, rose another 5c to 243, having already risen 50c yesterday after the bid.

Analysts believe the New Zealand drink firm is worth more to French giant Danone than it has offered.

Telecom, which yesterday dropped to a new eight-year low of 413, continued to recover today, rising 6c to 427. There is talk that Verizon is still attempting to place shares as it lowers its stake from 23 per cent to 19.9 per cent. Telecom's price will remain under pressure which that stock overhangs the market.

The NZSE-40 index was up 10.61 points to 1915.54 by shortly after midday on turnover of $28.6 million.

There were some quite large pre-market crossings including 3 million Air NZ B shares, which on market fell 1c to 30c. The As were steady on 30c. There were also parcels of half a million Carter Holt Harvey and Lion Nathan shares traded. The former was down 1c at 150 and Lion was steady at 520.

ABN Amro dealer Nigel Scott said the market was showing resilience.

"It indicates there is a bit of spare cash in the marketplace. Some of these stocks have a bit of stickability," said Mr Scott.

"The markets have a little more enthusiasm or confidence than they had last month. I don't think people have forgotten September 11 or what's happening globally but the lower interest rates and increase in money supply is helping to keep markets bubbling along."

Sanford fell 18c to 615 after a disappointing year profit yesterday. The net profit fell to $30.19 million from the previous year's $54.59 million.

Christchurch-based healthcare distributor Ebos, which yesterday announced plans for three company acquisitions in Australia and New Zealand before Christmas, rose 20c to 320.

Thinly traded Kirkcaldies rose 10c to 470.

Pyne Gould Guinness, formerly Reid Farmers, fell 4c to 118. Parent, Pyne Gould Corp said it was reducing its stake from 68 to 55 per cent via a placement at 112c/share.

Telstra was up 13c to 605, Sky City up 15c to 1190 and Baycorp up 8c to 1210.

There were 44 rises and 22 falls among the 115 stocks traded.

- NZPA