NZ stocks: Sharemarket softens, but Air NZ takes off

6.09pm


Australian regulators put some wind beneath Air New Zealand's wings today, but the broader sharemarket faltered to close slightly down

The Australian Competition Tribunal today gave the greenlight to a proposed alliance between the airline and Qantas -- the same tie-up scuttled last month on this side of the Tasman by the High Court. Air NZ rose 5c, or 3.2 per cent to 163 after the announcement today.

ASB Securities broker Stephen Wright said today's decision was a great fillip for the company. "I think most people had just given up on that whole thing," he said.

The rejection by the New Zealand High Court means the alliance could not go ahead in its original form, but the airlines said they would look at ways they could co-operate in Australia that would not contravene New Zealand regulations.

The original proposal involved Qantas taking a 22.5 per cent stake in Air NZ, allowing the airlines to co-ordinate pricing and capacity on routes to, from and within New Zealand.

While Air NZ took off today, the benchmark NZSX-50 gross index softened 1.71 points to 2859.76, while the NZSX-All capital index rose 0.02 to 951.76.

NGC rose 1c to 301, moving past the $3.00 per share Vector is paying Australian Gas Light for a 66 per cent stake in the company.

Under New Zealand's takeover code this offer must be extended to all NGC shareholders.

Mr Wright said when a takeover target trades above its offer price it generally indicates the market was saying the buyer was not going to get far with minority shareholders. He said while it was early days and anything could happen, it was difficult to see why a retail investor would swap out of a stock that was yielding around 9 per cent growth.

Toll NZ gained 5c to 275 after being granted an NZX waiver from having to get shareholder approval to refinance $269 million of debt held by its majority owner, Australia's Toll Holdings.

Shareholders in rural services company Wrightson liked what they heard at yesterday's annual general meeting, pushing up the stock 5c to 159 today. Wrightson management told the meeting yesterday it was getting back to basics in a bid to lift its net profit from $10.3 million for the last financial year to $16 million for the 2004-2005 financial year.

Fisher & Paykel Appliances continued to rise, up 3c to 420, after yesterday announcing the purchase of US appliance manufacturer and distributor Dynamic Cooking Systems.

Top stock Telecom rose 1c to 601 on turnover worth $45.9 million. Total market turnover was worth $95.7 million. Of the 157 stocks traded there were 61 rises and 49 falls.

Other stocks on the move today included: Carter Holt Harvey down 1c at 235, Contact Energy down 3c at 596, Lion Nathan up 11c at 801, Ports of Auckland up 9c at 680 and TrustPower down 10c at 474.

- NZPA