NZ Stocks: Sharemarket improves slightly during morning trading

12.00 pm

New Zealand shares opened firmer today, continuing the strong showing of yesterday but volumes were light but the market continued to improve slightly during the morning.

"Early volumes were light at $19 million, of which almost half were in Telecom, which continues to strengthen - as it did yesterday," Geoff Brown, at J P Morgan Chase said.

"We also saw a strong rally in Air NZ A and B shares yesterday and they will be helped by speculation during this morning over a local consortium interest in Air NZ.

"I think the market would regard the Brierley stake as a bit of a stumbling block in terms of where Air NZ sits at the moment," he said.

New Zealand individual investors and groups have approached Air New Zealand to buy Brierley Investment's 30 per cent stake held via the restricted A shares, Air NZ confirmed today.

The company also confirmed that Air NZ executives held talks with government ministers and officials yesterday on last week's proposal whereby Qantas would buy Singapore Airline's 25 per cent holding and the Brierley stake.

The NZSE-SCI capital index was 29.17 points - or 0.54 per cent - firmer, at 5399.35 - up from the opening 5393.35.

Turnover at 11am was 8.14 million shares, worth $26.46 million and of the 109 shares traded, 39 rose and 17 fell.

Market heavyweight, Telecom - which has a 23 per cent weighting in the Top 40 index - was topping turnover at 11am with 1.97 million shares worth $11.27 million and it was a cent higher at 573.

Fisher and Paykel was steady at 995 after it posted a $60.3 million after-tax profit - for the year ended March.

The result was better than expected and up on last year's $54.4 million annual profit but it was affected by $73 million in unusual items.

The company was also scheduled to update shareholders on its planned restructuring, which would see it separated along the lines of health-care and appliance-manufacturing divisions, with the intention of listing the health-care division on New York's Nasdaq composite index.

Lion Nathan was 5c higher at 505.

It is likely to be forced to surrender control of New Zealand's premier wine company, Montana, because it secured control in breach of Stock Exchange listing rules, the designer of the Market Surveillance Panel rules, Stephen Franks, said today.

Yesterday, the panel's Montana Standing Committee, comprising three QCs, ruled that the purchase of nearly 21 million shares during a period Lion was forbidden to buy on the night of February 8/9 breached regulations.

Montana shed 10c to 480.

Infratil, which went ex-dividend 5.25c on Tuesday, dropped a cent to 142 and wood-products' firm, Carter Holt Harvey, rose a cent to 1.85.

New Zealand's largest listed meat company, Richmond, rose 18c to 318. The prospect of a battle between a British meat company subsidiary, North Meats and the South Island's PPCS, for control of Richmond livened up on Tuesday with both parties lifting their bids.

North Meats said it was to up its restricted transfer notice price range to $2.95 to $3.50, from its earlier $2.70 to $3.24.

North Meats is a subsidiary of Norwich-based meat-and-poultry company, Bernard Matthews, which was to have entered the market for 60 per cent of Richmond today.

With the change in price range, however, it will delay its signalled market entrance until Friday.

Yesterday - after the market closed - rival PPCS, which has 16.7 per cent of Richmond, topped that with a restricted transfer notice that signalled a range between $3.10 and $3.65.

It did not give an effective date.

INL was 4c higher at 379 and Sky TV rose 9c to 345.

Air NZ's domestic A shares were a cent lower at 108 and the freely-held B shares were steady at 146.

Fletcher spin-off Rubicon was a cent higher at 58, Fletcher Building rose 3c to 238 and Forests was a cent lighter at 31.

The Warehouse rose 8c to 590, Contact Energy dropped a couple of cents to 283, Trans Tasman Properties was steady at 23 and Waste Management gained a cent to 386.

Among other moves, drinks company Frucor was steady at 162, casino operator Sky City lost 3c to 995, financial-services' company Tower was steady at 547, AMP gained 39c to 2515 and Baycorp picked up 15c to 1185.

- NZPA