NZ stocks: Fletcher Forests' capital return fuels market rise

Another big rise in Fletcher Forests' shares underpinned the sharemarket today, but the company's announcement of a capital return was overshadowed by an insider trading probe.

The news helped push the NZSE-40 Capital Index up 7.38 points or 0.37 per cent to 2015.27 on $63.8 million turnover.

The Stock Exchange and the Securities Commission both confirmed they would investigate after Forests' share price rose 9 per cent yesterday ahead of the official announcement this morning.

Nevertheless, Fletcher head shares jumped 10c to 118 today on a turnover of just over 837,000 shares, and preference shares were up 10c to 116 on 1.18 million shares.

Brokers said the news had renewed interest in Forests' fundamental values.

Today's $140 million capital return and a $US65 million sale of forestry cutting rights was "clearly good news" for the company, equating to 25 cents per share, Forsyth Barr Frater Williams broker Don Turkington said.

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

Fletcher Forests' 17.6 per cent owner Rubicon rose 2c to 75c, and GPG, a minority owner, was up 1c at 152.

Meanwhile, fellow forestry stock Carter Holt Harvey almost completely recovered from an 8c dip yesterday to be 6c higher at 189.

"It's just wild swings, there's no direction there at all...there's still a few stale bulls in that stock," Sam Macdonald of Direct Broking said.

Brokers said the overall market was characterised by continued New Year order flow in selected blue-chip stocks such as Carter Holt.

"Some that haven't been looked at recently are just starting to shine, like the Warehouse," said Mr Macdonald.

The Warehouse rose 8c to 738 on a solid $5 million turnover, and casino operator Sky City jumped 19c to a new all-time high of 849 as sellers shied away from buying momentum.

Fisher & Paykel Healthcare was showing signs of a technical bounce, up 11c to 961 on turnover worth $3 million.

Other leading stocks lost a bit of traction today, including Contact which fell 7c to 402.

Bullish Sky TV dropped 4c to 368 and its majority shareholder INL fell 8c to 329, apparently on profit-taking. A media report this afternoon said Sky's hedging policy would not give it immediately exposure to the rising currency.

Other moves included Telecom, up a cent to 470 on $22 million worth of shares; Steel & Tube, up 10c to 330; Waste Management, down 3c to 305 on heavy trading; and Air NZ down a cent to 55 despite announcing increased flights to Los Angeles.

Vending Technologies Ltd plunged 50c to an alltime low of 110 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.

There were 48 rises and 44 falls among the 124 stocks traded .

Wall St ended positively this morning after a good result from telecoms equipment company Alcatel and ahead of results from a number of key technology companies due later this week.

The tech-laden Nasdaq Composite rose 14.97 points, or 1.04 per cent, to 1,461.01, gaining steam at the end of the session. The blue-chip Dow Jones industrial average rose 56.64 points, or 0.64 per cent, to 8,842.62, and the Standard & Poor's 500 index gained 5.40 points, or 0.58 per cent, to 931.66.

- NZPA