NZ stocks: Telecom, Fletcher Energy shine again

Telecom and Fletcher Challenge Energy built on Monday's gains to lead the New Zealand sharemarket higher again yesterday, while Air New Zealand was little changed after reporting slightly better than expected annual results.

The NZSE-40 capital index closed up 16.25 points, or 0.78 per cent, at 2109.99 and smaller stocks also firmed. Turnover was again strong at $127.12 million, Telecom accounting for $58.29 million and Fletcher Energy $17.24 million.

Rises beat falls 60 to 46 among the 154 stocks traded.

"There was quite a bit of interest from both retail and institutional people," Greenslades broker David Ferguson said.

Telecom closed up 9c at 691. It is now up 7.6 per cent from its 3 1/2-year low struck on Friday.

People continue to sell after Telecom slashed its dividend while buyers focus on its transition to a growth company based on Australian operations. In that regard, Monday's confirmation of a $658 million five-year deal with Commonwealth Bank of Australia supported buying yesterday, as did continued talk of Singapore Telecommunications or some other foreign telco taking a big stake in Telecom.

Fletcher Energy continued in record territory, putting on 13c to 848 to extend an 85 per cent gain in value since the end of June. Overnight, California's Capstone Turbine Corp, of which Energy owns 11 per cent, was up once again, this time by 6 per cent. That pushes the stake's value well beyond $1 billion.

Energy is also benefiting from higher oil prices.

The Fletcher Challenge Group reports annual figures today and the market will watch for signs of progress on the future ownership of Energy, Forests and Building.

Building closed up 2c at 227 while Forests eased 3c to 86.

Air NZ posted a $600 million loss, related to consolidating Ansett Australia. Real profit was up 34 per cent at $178 million, higher fuel prices taking some gloss off otherwise solid operational numbers. The company announced an unchanged, unimputed final dividend of 9cps and said an announcement on the appointment of a new chief executive could be expected shortly. Air NZ is to raise $285 million via a rights issue to finish paying for the acquisition of Ansett Australia.

Air NZ A shares finished down 1c to 173 and the foreign B shares lost 5c to 225. Mr Ferguson said the market was still digesting Air NZ's numbers.

Agribusiness Wrightson reported a bottom-line profit of $7.5 million for the June year compared with a loss of $9.3 million previously. Its stock ended up 4c at 59.

Among middle sized stocks, Fisher and Paykel was up 5c at 745, Guinness Peat Group rose 5c to 150, Montana gained 9c to 259 - a cent below Lion's offer price - Tranz Rail was up 3c at 378 and Frucor jumped 16c to 229.

- NZPA