NZ stocks: Traders boosted by index buying

The sharemarket closed up for the second straight day yesterday as foreign investors moved to prop up their antipodean holdings after a surge in consumer confidence across the Tasman.

The NZSE-40 index closed up 6.83 points at 2065.87 on turnover worth $61 million.

There were 43 falls and 52 rises among the 147 stocks traded.

"It was a steady day really, both here and in Australia," ABN Amro head of institutional dealing Nigel Scott said.

Mr Scott said it looked as if much of the foreign buying was related to the Morgan Stanley Capital Index.

The MSCI index is important as it is used to benchmark funds, particularly passive funds, and managers of the heavyweight foreign pension funds often use it as a prime guide for investing in New Zealand.

Fourteen New Zealand stocks are part of the index. They include Air New Zealand B-shares, Baycorp, INL, Sky City Casino, Tower, The Warehouse, Carter Holt Harvey, Telecom , Contact Energy, Fisher & Paykel and Fletcher Building .

Carter Holt Harvey was one stock to benefit from the increased international interest, closing up 3c at $1.84.

Mr Scott said Carters was aided by signs of a pick-up in housing construction in Australia.

Fisher & Paykel and Sky City were also in favour, ending up 8c at $11.45 and 10c at $10.45 respectively.

Telecom was not so lucky, shedding another 2c to $5.49 after Australian telco Telstra's recent profit warning, while The Warehouse lost 1c to close at $5.75.

Lion Nathan was up 12c at $5.22 amid signs of good times ahead for it and rival Australian brewer Foster's.

International ratings agency Moody's Investors Service said yesterday the brewer was likely to see a strong cash flow over the medium term, despite the declining trend in per capita beer consumption and increased competition .

That positive news appeared to have outweighed the pressure Lion is feeling as it awaits a ruling on its contested holding in winemaker Montana.

Montana rose 3c to $4.83.

Media group INL closed up 12c at $3.66, after shareholders yesterday approved a move to majority ownership of Sky Network TV.

The company also unveiled plans for a share buyback.

INL is issuing 42.5 million new shares to Sky shareholder Todd Communications in a one-for-one swap that will complete a $231 million move by INL to 66.25 percent of Sky, from a previous 47 percent holding.

The issue will dilute current holdings in INL but the buyback of 2.5 percent of stock, around 10 million shares worth $36.6 million at today's price, may help restore the balance.

Air NZ B-shares closed down 3c at $1.42 and its As were steady as investors awaited more news on the possibility of a takeover by the airline's Australian rival, Qantas.

- NZPA