NZ stocks: Montana drama continues

Air New Zealand took another hit yesterday over more groundings at Australian subsidiary Ansett, while elsewhere in a mixed sharemarket Montana again provided the focal point.

Air NZ A shares were down 3c at $1 while the Bs, which foreigners can own, dropped 6c to $1.38.

"It's a continuation of the ongoing problems in Australia," JB Were's James Reid said, noting the branding damage done as people made comments to the effect they would never fly Ansett again.

Hundreds of passengers were delayed after Ansett grounded three of its jets due to mechanical problems, just weeks after 10 were grounded over safety concerns.

Meanwhile, Montana executive chairman Peter Masfen sold almost all his remaining stake to British drinks giant Allied Domecq. That gives Allied 27 per cent of Montana and rival Lion Nathan 62 per cent. With just 11 per cent of "free float" shares remaining, the next move in the takeover drama will come mid-next month after a special committee investigating alleged irregularities in how Lion acquired part of its holding says whether Lion can keep its stock.

Mr Masfen sold 34.9 million shares to Allied at $4.80, stripping his ownership to 0.03 per cent from 16.29 per cent.

Montana closed up 6c at $4.81 as Lion bought a little more.

The NZSE-40 capital index ended up just 3.23 points at 2052.72 and smaller stocks were also flat, the NZSE-SCI capital index easing 1.09 points to 5293.34.



Heavy turnover of 89.50 million shares worth $320.81 million was substantially accounted for by Montana and Contact Energy as Edison Mission Energy finished taking its stake to 50.1 from 40 per cent.

Thursday's budget passed without murmur in the sharemarket, although it had indirect implications as a bigger than expected bond programme pushed debt market yields higher, enhancing their attractiveness relative to shares.

The market's most important stock, Telecom, closed 7c higher at $5.66. Mr Reid said Telecom was expected to consolidate around current levels following Wednesday's $500 million stock placement, which was at 550 per share.

Earlier rumoured concern from some American investors about a further capital raising now appears unfounded.

Elsewhere, Frucor firmed 7c to $1.57, in the absence of a recent significant seller.

Guinness Peat Group was up 3c at $1.60, or the equivalent of 6c on a theoretical ex-bonus issue basis. Mr Reid noted the stock was still trading at a big discount to net asset value around 200.

Richmond, being hunted by South Island meat company PPCS, fell 5c to $2.85.

Carter Holt Harvey fell 2c to $1.80, Fletcher Challenge Building lost 5c to $2.33, GDC rose 11c to $2.35, INL fell 5c to $3.60, Lion Nathan rose 6c to $4.86, Powerco gained 2c to $1.67, Rubicon lost 3c to 57c, Sky TV was up 6c at $3.84, Waste Management dropped 17c to $3.62, Software rallied 8c to $1.28.