NZ stocks: Contact only light on dull NZ market

The only oomph for an otherwise tentative New Zealand market came from blue chip power company Contact Energy's better than expected annual result.

Squashing the market was leader Telecom, which lost 5c today to a one-year low of 496, on heavy turnover of 10.99 million stocks worth $51.25 million.

The NZSE-40 capital market closed down 11.77 points, or 0.60 per cent, at 1948.08 while the top-10 index was down 0.61 per cent at 877.67.

Total market turnover of 34.79 million was valued at $141.58 million.

Paul Savory of JB Were said Contact's $107 million September year profit provided the only bright spot, slightly better than the $100 million profit expected.

The result was down on the previous year's $131 million profit when Contact was a big winner from soaring winter wholesale electricity prices.

JB Were's valuation on the stock was about 465, compared with Contact's close today of 387, a 14c gain on yesterday's price.

Chief executive Steve Barrett said lower wholesale electricity prices during the year were offset by strong growth in Contact's retail customer base.

The outlook for rail and ferry operator Tranz Rail, on the other hand, looked bleak.

Tranz Rail shares were placed in a trading halt today after the company failed to reach an agreement with United States bank Citibank, one of four lenders for a new banking facility.

The national rail and ferry operator had hoped to tell the market today its new financial arrangements were signed and secured, clearing the way for a $66 million rights issue starting on Monday.

Shares in Tranz Rail last traded at 128, unchanged on yesterday's close, after hitting an all-time low of 122 earlier this month.

"It's something that needs to be addressed very, very soon, the next day or two," Mr Savory said.

"It can't be left - it places the whole rights issue in jeopardy, and that's something that's further bad news for Tranz Rail. I think that will be reflected in the share price once it starts trading again.

Telecom, which has a 22 per cent weighting in the NZSE-40, was sold down today below the level it slid to following a profit warning last week.

"It's just more of this stock that was placed at 450 is coming out, with overseas institutions who had picked it up at a pretty good price just not prepared to take the risk," he said.

The normally high-flying Auckland International Airport fell a further 11c today to close at 537 after yesterday's 6c drop.

"Just a bit of profit-taking after a recent good run," Mr Savory said.

"The tourism numbers out today were 14 per cent higher, but that was pretty much in line with market expectations."

Short-term visitor arrivals in New Zealand were up 14 per cent in October compared with the same time last year, according to latest statistics.

Elsewhere on the market, Air New Zealand lost 1c to 49, Baycorp Advantage was up 8c at 233, Carter Holt Harvey fell 2c to 168, Fisher & Paykel Healthcare was down 15c at 1070, Fletcher Building lost 4c to 320, and Sky TV was down 7c at 330.

Among the newcomers, plastics manufacturer Vertex was up a further 3c at 133, while biotech company Botry Zen rose 2c to 16 after listing yesterday.

There were 47 falls and 40 rises on the 135 stocks traded.

On Wall St, the Nasdaq Composite Index rallied 45 points, or 3.26 per cent, to 1419.35; the Dow climbed 148 points, or 1.75 per cent, to 8623.01; and the broader Standard & Poor's 500 Index jumped 17.4 points, or 1.94 per cent, to 914.15.

- NZPA