NZ stocks: Market in positive territory, Telecom rises on result

12.00pm

The New Zealand sharemarket was in the black this morning as market leader Telecom announced a positive first half result, although turnover was light.

By mid-morning the NZSE-40 capital index was up 7.51 points, or 0.38 per cent, at 1979.46.

Telecom's second quarter and half year results were at the higher end of forecasts at $155 million and $301 million respectively. Expectations were for $149 million and $296 million.

Telecom shares opened up 7c but eased back 3c by mid-morning to 449.

Stephen Wright of ASB Securities said Telecom's result slightly bettered expectations.

"But revenue is down slightly. Cashflow positive in Australia, it's still tough over there, and the main emphasis is on cutting costs -- which is all fine, but obviously the market prefers revenue growth," Mr Wright said.

Telecom's turnover of $6.70 million topped total volume of 9.50 million stocks, valued at $18.91 million.

Retailer Briscoe Group, which announced 17 per cent growth in December year sales yesterday, was down 1c at 274. Fellow retailer The Warehouse, which announces second quarter sales figures tomorrow, was up 3c at 711.

The market largely overlooked another piece of bad news last night for rail operator Tranz Rail, which was down only 1c at 138 this morning.

Ratings agency Standard & Poor's said Tranz Rail had jeopardised the removal of a downward indicator on its credit rating by looking into shifting its interisland ferries to Clifford Bay from Picton.

S&P's said Tranz Rail had intensified pressure on its rating by looking at Clifford Bay even though it reported a satisfactory half-year result.

Elsewhere on the market, AMP gained 9c to 1010 after its shares were up across the Tasman yesterday.

"As you'd expect, Tower was up (2c at 210) after news Guinness Peat Group is nearly up to 10 per cent," Mr Wright said.

After the market closed yesterday, GPG disclosed it now controls 9.93 per cent of Tower after buying a 5 per cent stake of 8.8 million shares at $2.085, pushing Tower's share price up 4c to 208.

Carter Holt Harvey was up 2c at 174, Contact Energy gained 4c to 424, Fletcher Building was up 5c at 358, Baycorp Advantage rose 2c to 222, and Auckland Airport gained 1c to 540.

Fabric maker and marketer Designer Textiles was up 2c at 115 on news it planned to return about $6 million to shareholders by way of a pro-rata share buyback.

Fisher & Paykel Healthcare gained 2c to 1020; Powerco lost 3c to 143, Sky TV lost 1c to 349, Sky City fell 1c to 862, and takeover target Richmond was down 4c at 294.

There were 41 rises and 24 falls on the 106 stocks traded.

On Wall St, the blue-chip Dow Jones industrial average closed up 56.01 points, or 0.7 per cent, at 8109.82; the Standard & Poor's 500 Index rose 4.61 points, or 0.54 per cent, to 860.31; and the Nasdaq Composite Index gained 2.87 points, or 0.22 per cent, to 1323.78.

- NZPA