NZ stocks: Sharemarket quiet, led lower by Telecom

12.15 pm

The New Zealand sharemarket was lower today as market heavyweight Telecom started the week in negative territory.

By mid-morning the NZSE-40 capital index was down 13.57 points, or 0.67 per cent, at 2025.82. Turnover was quiet, with 7.46 million stocks traded, valued at $27.57 million.

Leading turnover was Australian-based heavy industrialist BHP Billiton, with $15.58 million worth of stocks traded, followed by Telecom's $3.83 million.

Brett Wilkinson of DF Mainland said there had been reasonable two-way business despite the small turnover.

"There's nothing that's moved for a reason - the market is still largely driven by single orders," Mr Wilkinson said.

By mid-morning Telecom was down 4c at 503 after a weaker performance during the weekend.

Natural Gas Corp, which posted a net $301.55 million annual loss this morning as forecast, was unchanged from its opening level, down 4c at 103.

The company, majority-owned by Australian Gas Light Corp, achieved an operating profit of $9.9 million after abnormal pre-tax losses of $311.5 million.

Fletcher Building was weaker, down 8c at 249 ahead of its result on Wednesday which is expected to show a further decline in earnings. Analysts estimate total write-offs approaching $250 million.

Technology bellwether stock Advantage Group gained 5c to 45 despite a $65.8 million year loss posted on Friday.

Advantage was another company to exhibit "balance sheet realism" with large write-offs - $60 million of good will - and looking to make a fresh start.

"The same thing with Fletcher Building, Advantage and NGC - the directors have taken the worst case scenario and written everything off that they can and refocused the company," Mr Wilkinson said.

Contact Energy was down 6c at 319 after a good performance last week, although the move was on minimal turnover - about 70,000 shares.

Contact's rating was reaffirmed by international credit rating agency Standard and Poor's last week although it was placed on a negative outlook.

Fisher & Paykel was down 7c at 1290 on small volume, The Warehouse lost 2c to 558, Telstra was down 10c at 595 and Baycorp was down 20c at 1320. Carter Holt Harvey lost 2c to 170, Fletcher Forests was down 1c at 33 ahead of its annual result on Thursday, UnitedNetworks lost 4c to 856, Sanford was down 665 and Rubicon fell 1c to 81.

Ports of Auckland gained 2c to 553, Tower gained 2c to 512 and Cavalier was up 2c at 575.

Air New Zealand A shares were down 2c at 108. ahead of the Government's decision, expected by the end of the month, on whether to raise the foreign ownership cap on the airline, allowing shareholder Singapore Airlines to help with a bail-out. The Bs were unchanged at 135.

With no fresh news out there was no move from players in the other major game in town, brewer Lion Nathan and takeover target winemaker Montana, which were also unchanged (at 515 and 480 respectively).

There were 50 falls and 22 rises on the 103 stocks traded.

On Wall Street on Friday, the technology-laden Nasdaq Composite Index sank 63 points, or 3.26 per cent, to 1867.32.

The blue chip Dow Jones industrial average tumbled 175.06 points, or 1.68 per cent, to 10,217.46 and the broader Standard & Poor's 500 Index dropped 21.17 points, or 1.79 per cent, to 1160.49.

- NZPA