NZ stocks: Contact stars but Air NZ dips at close

After a flurry of activity on the NZSE-40 yesterday morning, the sharemarket retraced its steps almost to where it had started.

The capital index closed up 0.81 points to 2069.93 on turnover of $69.9 million.
Morning trade was up across the board, following on from a 24-point rise on Wednesday.

Stars for the day had been Air New Zealand, the Warehouse and Contact Energy.

Earlier in the day, Air NZ touched a fresh high of 60c but its stellar run since last Friday began to lose some steam and it closed down 3c at 53c.

The stock has risen 39 per cent in four days after a better- than-expected profit forecast, an optimistic broker's report and index buying fuelled by an increase in Air NZ's market capitalisation.

The market was well pleased with Contact Energy's half-year profit results yesterday, the stock rising 8c to $4.12. Although the energy company's net profit fell 16 per cent, its underlying profit was 55 per cent up at $40.3 million.

Retailer The Warehouse also rose to a fresh year high of $7.56, up 16c, on low turnover, which indicated the stock was in short supply.

Ports of Auckland gained 10c to $6.35. Brokers said the port, which is often seen as an economic bellwether, was probably expecting more trade, as indicated by rising import figures this week.

On the downside, debt collection agency RMG fell 5c to 12c on a series of announcements, topping the turnover with 13.1 million shares.

It responded to a please explain from the Australian Stock Exchange, which confirmed in more detail its warning of lower full-year revenue than expected.

RMG also announced that its chief financial officer, Paul Wilkinson, had resigned and that former chief executive Paul Cooney was taking over as deputy chairman and chief operating officer.

"I think the market is questioning the credibility of management and the board because only in February they put out a reasonably bullish letter to shareholders and 10 weeks later, there's a new story," said John Elsom, a director with Greenslades.

RMG is 17.5 per cent owned by Eric Watson's Cullen Investments.

Rival Baycorp Advantage also fell 10c to $4.80.

Market leader Telecom fell 4c to $4.84 on $12.3 million worth of shares, and its Australian rival Telstra tumbled 25c to $5.84 after Telstra posted a 1.1 per cent fall in third-quarter core sales, and weaker-than-expected mobile revenues.

Other moves included Sky City up 8c to $6.20, Advantage Group up 2c to 41c, and WestpacTrust steady on $18.45 after posting a 7 per cent increase in first-half profit.

There were 56 rises and 39 falls on 139 stocks traded.

On Wall St, investors picked up cheap stocks following the carnage created by worrying profit forecasts.

The Dow Jones was back above the psychologically important 10,000 mark.

* The New Zealand dollar was little changed yesterday as looming Asian holidays kept investors at bay.

By 5pm the kiwi was at 44.85USc, a touch higher than Thursday's 44.78c close.

"It's been a very quiet day," Bank of New Zealand currency strategist Stu Ritson said.

With Japan on holiday today and Monday, local investor action had all but dried up, he said.

In Tokyo, the US dollar slipped to two-month lows against the yen, struck down by bearish comments from Treasury Secretary Paul O'Neill.

Testifying before the Senate Banking Committee, Mr O'Neill said he doubted Governments could affect currency values either through rhetoric or by actual market intervention.

That saw the greenback skid to a low of 126.96 yen in Tokyo.

- NZPA