NZ stocks: Shares rise in morning session dominated by CHH

1.00pm

The New Zealand sharemarket made modest gains in a morning session dominated by a mildly deceptive first quarter result from wood processor Carter Holt Harvey.

At midday the benchmark NZSX-50 gross index was 3.33 points or 0.13 per cent higher at 2639.72, while the NZSX all capital index was up 1.78 points or 0.2 per cent at 892.25.

Turnover by 11.30am was worth $31.72 million and rises outnumbered falls 47 to 25 on 114 stocks traded.

Goldman Sachs JB Were institutional advisor Joe Gallagher told NZPA it had been a busy morning for news on the market this morning.

"We've seen a Carter Holt result that on initial inspection looked to be a little bit weaker than the market's expectation."

The company reported its first quarter net profit fell 25 per cent from a year earlier to $38 million against analysts' expectations of $45 million.

However, Mr Gallagher said closer inspection showed the company had expensed a $9 million equity based incentive plan for employees and had made a $7 million charge for business restructuring.

"So if you add back these charges the ebit (earnings before interest and tax) outcome was actually slightly above expectations."

Carter Holt shares were trading 3c lower at 223 shortly after midday.

A quick 4c rise to 465 by electricity generator and retailer Contact Energy initially helped the market higher immediately after opening while market leader Telecom ticked higher by a cent to 575 despite a dip on the US market where the company is also listed.

Elsewhere, the New Zealand dollar's fall overnight to a five month low stimulated buying interest in export company shares, such as Fisher & Paykel Healthcare. Fisher & Paykel Healthcare was up 10c to 1248 by 11.30am.

Meanwhile, softer than expected migration numbers released today would have been closely watched by companies in the building sector Mr Gallagher said. Fletcher Building shares were 3c lower at 458.

Mr Gallagher said the morning's relatively light turnover was likely " a case of the market digesting the news before it takes too much action".

Stocks to move by 11.30am included: BayCorp Advantage down 3c 317, Cavalier Corp up 5c to 490, Fisher & Paykel Appliances down 2c to 437, Independent Newspapers Ltd down 3c to 481, Infratil up 3c to 295, Michael Hill up 3c to 590, NZOG up 4c to 70, Sky City up 2c to 448, Sky TV up 2c to 522, Tower up 3c to 168, The Warehouse down 2c to 428, and Waste Management up 8c to 451.

- NZPA