NZ stocks: Solid day topped with TranzRail announcement

6.00pm

solid day's trading on the New Zealand sharemarket was topped by the surprise announcement that the Government will buy up a sizeable chunk of the troubled national rail operator Tranz Rail.

The benchmark NZSX50 gross index rose 7.15 points or 0.34 per cent to 2108.92 and the NZSX40 capital index rose 5.88 points or 0.28 per cent to 2074.35.

Turnover was $97.16 million on 32.24 million shares traded prompting JB Were institutional adviser Joe Gallagher to comment: "That's a good enough day."

However Mr Gallagher said the market's main feature today was the late announcement from the Government of a proposed rescue package for Tranz Rail.

A trading halt was placed on the rail operator's shares this afternoon shortly before the Government said it had signed a heads of agreement with the company to buy a 35 per cent stake for $75.8 million.

A statement issued by Tranz Rail said the Government would be issued new shares at 67 cents each against the last traded price of 80 cents.

Tranz Rail is currently under takeover offer by Australian distribution company Toll Holdings at 75 cents per share.

"Although dilutive for shareholders it de-risks the company to a certain extent," Mr Gallagher said.

"At this stage without going through all the detail (it) looks to be a pretty good deal for all involved.

"Toll Holdings obviously needs to look at it, it dilutes them, they need to respond."

Elsewhere, Mr Gallagher said, trading was "pretty uneventful" with market giant Telecom's shares traded only in average volumes today.

"The stock has run into a fair bit of profit-taking over the past few days, after going ex-dividend," he said.

Telecom shares were up a cent today to 509.

Mr Gallagher said that both Fisher & Paykel stocks maintained to enjoy a strong run today with Fisher & Paykel Appliances, in particular, continuing to be re-rated following a good result.

Fisher & Paykel Appliances rose 55c to 1300 and Fisher & Paykel Healthcare gained 10c to finish at 1150.

Sky City also had a good day rising 5c to 870. Its gain was not because of any good news, Mr Gallagher said. "I just think it's a bounce back from a period where it was impacted by fears of Sars and what that might do to earnings."

Other stocks to rise included Air NZ up a cent to 52, Contact Energy up 3c to 483, Fletcher Building up 3c to 366, Independent News Ltd up a cent to 427, Mainfreight up a cent to 130, New Zealand Exchange up 10c to 420, Restaurant Brands up 4c to 143, and Tower Group up 3c to 163.

Stocks which fell included Auckland International Airport down 5c to 545, BayCorp Advantage down 4c to 176, Briscoe down 3c to 206, Genesis down 5c to 125, Sanford down 20c to 520, Sky TV down 2c to 448, and Telstra down 3c to 510.

There were 55 rises and 37 falls among the 129 stocks traded.


- NZPA