NZ stocks: Shares meander lower, Air NZ B shares continue plunge

The sharemarket meandered lower today in quiet trade that was affected by the Labor Day holiday in the United States.

Telecom, initially dropped to an eight month low of 487, but turned around from yesterday's close of 495 to be 5c up at 500 shortly before noon.

Brokers said concerns of its credit downgrade and further weakness in Europe telcos had weighed on it but then invested decided it was oversold.

The NZSE-40 index was off 3.30 points to 2038.90 in the first hour of trade. Turnover was $15.7 million and there were 28 rises against 31 falls among the 100 stocks traded.

Air New Zealand's B shares continued their plunge as investors become increasingly convinced that the Government will abolish the class distinction between the A and B shares.

The B shares, which can only be help by non-New Zealand residents continued their plunge today, dropping 10c, or 8.5 per cent, to 96c, but later recovered to 100. They are now only 11 cents above the A shares, which fell 1 cent to 89 cents. The B shares have lost 16 per cent this week and 57 per cent this year.

The B shares, which comprise 49 per cent of the company, have had a near disastrous descent from $3.66 in June 1999 when Singapore Airlines started showing interest in Air New Zealand.

There was also concern that the cash-strapped Air NZ is considering spending $300 million to buy Australian discounter Virgin Blue.

"I think people have still got the view that we may end up with the two shares coming together - just having one listed vehicle for the whole company," said ABN Amro broker Mike Hare.

"Some people have been thinking that for some time. It's amazing it's taken this long to get into the market," he added.

GPG rose 1c to 170 after reporting that foreign exchange losses of Stg3.1 million ($NZ10.4 million) and a write down of Stg5.3 million from Otter Gold ate into its Stg12.3 million half year profit, the company said today.

Among others to move, Carter Holt Harvey was up 2c at 169, Baycorp was down 5c at 1360 and Westpac NZ was up 15c at 1565.

Sky TV, due to report its result on Thursday, fell 4c to 356 and Steel & Tube rose 4c to 200.

CDL Hotels, which yesterday reported an improved result, rose 0.4c to 20c.

- NZPA