12.00pm
The New Zealand sharemarket showed no sign of panic today after a fresh accounting crisis relating to US phone company WorldCom caused palpitations on Wall Street today.
Wall Street first pushed the sell button as an accounting scandal at WorldCom rattled markets worldwide but then stocks recovered almost all their lost
ground late in the afternoon as investors bought a slew of beaten-down shares.
The NZSE-40 Capital Index was up 3.02 points to 2067.00 at 11.45am with Telecom steady on 498, having initially being up up 4c to 502 and after its was sold 15c yesterday.
JB Were broker Murray Rutherford noted that in the end Wall Street did not have a bad day following the morning rout.
"The market here is very calm and controlled and trading nicely firm. There is certainly no panic."
He does not expect any longer-term fallout even if WorldCom collapses.
Mr Rutherford said one of the attributes of the New Zealand market was that it was slightly removed from such fluctuations.
"There are a lot of good value companies in New Zealand that have no exposure to the telecommunications sector and being a little remote people can view New Zealand as a little bit of safe haven."
However, he added that confidence in equities was something that transcended all borders.
Telecom is understood to have little or no exposure to WorldCom debt. WorldCom owns 10 per cent of Southern Cross Cable. Telecom owns 50 per cent and SingTel owns 40 per cent and have options to buy out WorldCom's stake. Brokers said they might get the stake cheaply in a fire sale.
The New Zealand sharemarket took a pasting yesterday, with the top 40 index down 1.6 per cent and the top 10 index losing nearly 2 per cent.
Today, there were just over 16 million stocks traded worth $45 million.
There were few moves of note. The Warehouse was up 6c to 744, AMP was up 10c to 1790, Carter Holt Harvey was up 2c to 198, Independent Newspapers was up 5c to 375, Sky TV was down 5c to 440 and Fletcher Building was up 2c to 274.
Pacific Retail continued its volatile course, falling 9c to 311 today.
In all, there were 26 rises and 24 falls among 111 stocks traded.
- NZPA
