NZ stocks: Stocks up in active session

The New Zealand sharemarket recovered slightly yesterday amid rumours that market leader Telecom was seeking a stake in pay TV operator Sky TV.

The NZSE-40 capital index closed up 5.53 points, or 0.28 per cent, at 1966.33.

Brokers reported an unsuccessful overnight attempt to buy 10 per cent of Sky Network TV, and speculation was strong that it was on behalf of Telecom.

"Overnight, CS First Boston attempted unsuccessfully to buy 10 per cent of Sky TV. We don't know who for, but it was obviously on an all-or-nothing basis and they weren't able to get them," said JP Morgan head of institutional broking John Rattray.

A senior broker for CS First Boston denied that it made the attempt, and Telecom said its policy was not to comment on speculation. Another source confirmed the speculation, but said the broker involved was JB Were.

Telecom fell 7c to $5.13 after trading as low as $5.05. Sky TV, which posted a $19.55 million loss, was up 5c at $3.80.

Telecom on Thursday reported a 29.4 per cent fall in profit to $139 million for the December quarter, below forecasts of between $144 million and $151 million.

Peter Wardell of Forsyth Barr said Telecom was unlikely to sit still.

"I suspect there's probably a lot more to come out of Telecom - they're not just going to sit there and let the competition nibble away at them.

After the market closed, Fletcher Building announced it was seeking clearance to acquire up to 100 per cent of Steel and Tube Holdings. Building closed down 2c at $2.22. Energy was down 8c at $8.98, and Steel and Tube was up 2c at $1.53.

INL reported a 41 per cent fall in its net profit to $13.99 million for the half year to December 31. INL closed down 8c at 362.

Mr Wardell said corporate activity recently had indicated to investors that a lot of stocks were undervalued. "People are seeing that this is an opportunity to get themselves positioned."

Baycorp closed up 50c at $12.00 and Auckland Airport, led by chief executive John Goulter, put on 20c to $3.35. Fisher and Paykel rose 8c to 818, Lion Nathan gained 20c to $4.80, Montana was up 10c at $3.95, Sky City rose 14c to 900 and Tranz Rail was up 1c at 386.

Genesis plunged 95c to $6.40 as investors indulged in a spot of profit-taking after the company's announcement on Thursday that preliminary US trials on its new psoriasis treatment drug had been successful.

The New Zealand dollar had a mild reversal of fortunes on Friday, and was picked to head back towards 43USc overnight.

The kiwi closed locally at the top of its range, trading at 42.80USc at 5pm.

"A surging US dollar still rules the roost," HSBC said in a commentary yesterday.

It said the kiwi was now 4 per cent down for the year. The Australian dollar had fared worse, losing 6.5 per cent.

- NZPA