NZ stocks: Fletcher Forest jump keeps market heading north

12.00pm

Yesterday's big rise in Fletcher Forests shares was explained today following its announcement of a capital return which helped keep the sharemarket positive.

Brokers said there more than a whiff of insider trading about the deal given Forests' share price rose 9 per cent yesterday ahead of the official announcement.

"It's amazing how these things seem to leak," said Forsyth Barr Frater Williams broker Don Turkington. "In most markets in the world you would get an inquiry on a stock that moves 7 to 9 per cent, but not here," he said.

The Stock Exchange said it and the Securities Commission would investigate the trading, which saw Forests head shares close 7 cents higher at 108 yesterday -- having at one point traded as high as 110 -- while the preference shares ended up 5c at 106.

The head shares jumped another 8 cents to 116 today, while the preference shares were up 10 cents to 116.

"Clearly it's good news," said Dr Turkington of the US$65 million sale of forestry cutting rights and the $140 million capital return, equating to 25 cents per share.

He said the capital return was clearly superior to the planned $50 million share buy-back.

The NZSE-40 capital index was up 10.46 points, or half a per cent, to 2018.35 by 11.30am on light volume of $21 million.

Fletcher Forest's 17.6 per cent owner Rubicon rose 2c to 75c.

GPG, a minority owner, was up 1c at 152.

Forestry giant Carter Holt Harvey, which yesterday shed 8c on profit taking, recovered almost half of that today to be at 186.

There was little else of interest on the market.

The Warehouse was up 6c to 736, continuing its good run based on the rise of the New Zealand dollar.

Similarly, Sky TV, which buys much of its programming in US dollars, was up another 2c to 374.

Fletcher Building fell 1c to 342, Sky City Entertainment was up 11c to 841 and Telecom was up 4c to 473.

Vending Technologies Ltd plunged 5c to 155 -- a 26-month low -- on light volume after it warned its full year profit will fall short of last year's result.

Property For Industry was unchanged at 93c after announcing it has bought a Wellington industrial property for $2.06 million.

Air New Zealand slipped a cent to 55c despite announcing it will increase its return flights between Auckland and Los Angeles to 17 a week from 14 following the withdrawal of United Airlines from the route.

There were 37 rises and 22 falls among the 104 stocks traded so far.

- NZPA