NZ stocks: Telecom propels sharemarket higher

12.00 pm

An 18c rise in Telecom to 478 after its first quarter result propelled the sharemarket 0.9 per cent higher in early business.

The NZSE-40 index was up 18.33 to 1986.84 at 10.15am on light volume of $19.6 million.

Wall Street had been rattled by an airliner crash in New York which initially looked like a terrorist act but investigators later said looked like an accident. The Dow ended with a modest loss of 53.63 points, or half a per cent, after being down over 2 per cent earlier when the market had been spooked by the crash.

Telecom's first-quarter profit fell 6.2 per cent, reflecting the cost of completing its takeover of Australia's AAPT and slowing domestic sales.

Profit from operations in the three months to September 30 fell to $151 million from the year-earlier $161 million. Sales rose 9 per cent to $1.41 billion. Funding costs and goodwill charges arising from the AAPT purchase will depress net income for as much as two years, the company warned.

UBS Warburg broker Campbell Stuart said Telecom's result had been well received and was slightly ahead of UBS's forecast.

"It looks marginally ahead of our forecasts at the EBITDA level and they made reasonably good noises on capex, but we have not deciphered all the detail yet," he said.

Australian counterpart Telstra was up 14c to 625 with the right leaning government re-elected in Australia and further privatisation on track.

Air New Zealand shares were little affected by the crash in the US, which is picked to depress international travel further. The A shares were 1c down at 28c and the Bs 1c up at 29c.

Contact Energy was flat at 404 despite an announcement it would be affected by the depletion of the Maui gas field in 2007, two years earlier than expected. Natural Gas Corp was up 1c to 129 after the announcement. The Hutt Mana Energy Trust decided yesterday it would sell its 10 per cent stake in NGC.

Fletcher Building was up 4c to 264 after losing 8c yesterday when it went ex a 6cps dividend.

Fisher & Paykel Healthcare was untraded and investors were holding back until tonight when the pricing for the ADRs to be listed on the Nasdaq are due to be listed.

Lion Nathan was up 1c at 536, Scott Technology was down 6c to 145 and Guinness Peat was down 2c at 158.

Northland Port was untraded after it reported a doubled half year net profit of $1.64 million.

Shares are expected to get a further boost tomorrow when the Reserve Bank is forecast to cut interest rates by a further half a percentage point.

- NZPA