NZ stocks: Fletcher Forests stars in stronger trade

The sharemarket firmed yesterday with Fletcher Forests a focus and second-tier stocks making the play.

The NZSE-40 capital index ended up 6.22 points at 2151.68 and small stocks continued recent strength. Volume was again heavy at $118.89 million, Telecom accounting for $52.27 million and Fletcher Forests $11.92 million.

Fletcher Forests was up 4c at 90 on rumours about its future ownership as the August deadline approaches for the Fletcher group to make break-up decisions.

Tower, up 9c at 539, was more grist to the rumour mill as chat that it was a takeover target for ANZ Bank or Westpac re-emerged.

Cavill White broker Richard Burton said liquidity in the market was up after the release of Fletcher Paper money following its recent sale. "The smart people are thinking there is either going to be a bid for Fletcher Energy or Forests. When that money comes free it is also going to provide some extra liquidity to the market, so people will probably be positioning themselves for that."

Telecom, which was hit after Tuesday's announcement that its dividend would be cut to 50 per cent of profits, was up 1c at 716. Mr Burton said even at that level the dividend was bigger than global telcos generally.

Natural Gas Corp was down 2c at 163. It reported a sharp lift in profits on continuing operations, but warned of turbulent times ahead in energy trading. TransAlta, which NGC has most of and wants to own completely, announced a truncated six-month result because of a change in balance date. Net earnings were $18.2 million for a six-month long financial year to June 30. Its stock fell 5c to 285.

The Warehouse was up 20c to 605 after saying it had completed the acquisition of Australian discount chains Clint's Crazy Bargains and Silly Solly's.

Sky City rallied 15c to 785 after its strong result.

INL, to announce its annual result today, was down 4c at 416.

Montana, also reporting today, was flat at 236. DB was up 8c at 320.

- NZPA