NZ stocks: Market emulates Wall St, up across the board

12.00pm

The New Zealand sharemarket continued to take a lead from Wall St's resurgence, rising across the board.

After rising 24 points yesterday, the NZSE-40 capital index was up 12.98 points just after 11am to 2082.10, a rise of 0.63 per cent, on turnover of $17.2 million.

Air NZ continued its spectacular ascent, up 1c to 57, mainly on institutional and index buying. The stock is now up 50 per cent from Friday's close, although DF Mainland dealer Greg Arnott felt it would not continue for much longer.

"The thing that worries me is what are people buying here? It had the largest corporate loss in New Zealand's history and you're basically buying thin air at the moment."

Another star performer was Contact Energy, up 11c to 415 despite a lower than expected half year profit to March of $30.05 million.

Investors appeared to be acknowledging the underlying profit which, after adjusting for non-recurring items, was up 55 per cent to $40.3 million. A healthy 5.5c a share dividend had also been welcomed.

By comparison, the fortunes of debt collection agency RMG took a dive, losing 6.5c to 10.5 and topping the turnover on 7.2 million shares.

The 38 per cent fall in share price follows a mixed report from the trans-Tasman company after pressure from shareholders to explain the dwindling share price.

RMG warned that it expected its annual result would be lower than expected -- an ebitda profit of around A$500,000 ($608,420.54) to $A1 million and a revenue between A$49 and A$50 million, about $10 million short of its forecast.

However, it said its New Zealand and Malaysian subsidiaries continued to operate profitably and operational difficulties related only to RMG's Australian collection business.

"Although it's not a mainstream stock on the New Zealand exchange, it's quite keenly held with its synergy with Baycorp...people have done a lot of switching lately into RMG as possibly the next Baycorp," Mr Arnott said.

Baycorp Advantage fell 5c to 485 after a 14c spike yesterday.

Market benchmark Telecom was up 1c to 489 on $3.6 million turnover.

Retailer the Warehouse picked up 15c to 755 and WestpacTrust rose 20c to 1865 after its Australian parent reported a 10 per cent rise in first half net profit.

Other moves included Sky City up 7c to 619, Auckland Airport up 3c to 440, Kingsgate up 2c to 20, Advantage Group up 5c to 44, Independent News up 5c to 375, Pacific Retail up 5c to 235, and Carter Holt Harvey up 1c to 186.

Rises outnumbered falls 46 to 20 on 106 stocks traded.

On Wall St, investors picked up cheap stocks from the recent carnage caused by worrying profit forecasts.

The Dow Jones industrial average was up 113.41 points, or 1.14 per cent, at 10,059.63, sending the blue-chip index back above the psychologically important 10,000 mark.

The broader Standard & Poor's 500 Index added 9.54 points, or 0.89 per cent, to 1,086.46. The technology-laced Nasdaq Composite Index slipped 10.70 points, or 0.63 per cent, to 1,677.53.

- NZPA