Stocks: Tranz Rail surges but market lies flat

A sharp jump in Tranz Rail shares was the standout feature as the sharemarket edged backwards today.

Tranz Rail shares jumped 11 per cent on speculation that the Government was in secret talks to buy back part, or all, of the railway company's tracks.

Tranz Rail's share price, which last year collapsed on a raft of worries about the company's finances -- from 423 last March to 106 at year-end -- today jumped 12 cents to 121 on a turnover of 1.7 million shares.

Brokers said it was a simple "knee-jerk" reaction.

The NZSE-40 capital index closed 1.40 points down to 2009.22 on moderate turnover worth $70 million.

Telecom dominated activity on $14.9 million worth of shares, losing 3c to 461.

The telco said today it expected to raise between $300 million and $400 million of debt to meet its funding requirements for the financial year. It also signed a deal with BCL to provide wholesale high-speed internet services to rural and regional customers later this year.

In-play stock Fletcher Forests ordinary shares fell back 1c to 119 after a couple of extremely active days. Driving factors in the share price have been news of a 25c per share capital return, a sale of cutting rights, and an insider trading probe by authorities. Preference shares eased 2c to 117.

Meat company Richmond fell another 10c to 275 after turkey magnate Bernard Matthews secured a 4.3 per cent stake yesterday, driving another nail in the coffin of PPCS's takeover bid.

Carter Holt Harvey was down 2c to 187 after its 51 per cent owner, International Paper today reported it will take a US$450 million ($837 million) charge to cover a shortfall in claims payments for its building siding and roofing products.

The world's biggest paper company said it expects fourth-quarter earnings to slightly beat analysts' average estimate s. Results for the period are due on January 30 with Carter Holt reporting its annual result the day before.

Tourism Holdings shares rose a cent to 119, having hit a 10-month high yesterday. The country's largest tourism operator confirmed today it was mulling a return of capital, and that it was on track for a projected half year net profit of around $4 million, excluding abnormals.

However, the 20 per cent rise in THL's price this year has prompted a Stock Exchange query.

Other movers included Fisher & Paykel Healthcare up 19c to 999; Independent Newspapers, down 6c to 323; Lion Nathan up 8c to 603; Michael Hill up 10c to 640; Skellmax up 4c to 112; and Sky City Leisure up 7c to 215.

There were 48 rises and 40 falls among the 131 stocks traded.

In the US, geopolitical and oil price fears prevailed. The tech-laden Nasdaq Composite fell 15.03 points, or 1 per cent, to 1,423.77. The blue-chip Dow Jones industrial average dropped 25.03 points, or 0.29 per cent, to 8,697.87, and the broader Standard & Poor's 500 index sagged 3.62 points, or 0.39 per cent, to 914.60.

- NZPA