Fletcher stocks down after fireworks

WELLINGTON - The New Zealand sharemarket again turned in a damp squib performance yesterday, finishing lower for a third straight session.

"The market was quite soft. The main features were the Fletcher group with its shares all ending lower after the agm on Thursday," said Richard Leggat at Merrill Lynch. "The market is annoyed that the restructuring plans that the company were proposing are not going to be completed in the next little while. I think investors were holding out for something to happen, even though the Fletcher Canada deal didn't."

Fletcher Energy fell 12c to 443c, Paper 3c to 127c, Forests 3c to 77c and Building 3c to 242c.

"Telecom also dipped - down 10c to 776c. That company is going to end up with more AAPT than they had initially desired. We don't think that's a major problem.

"But with Cable and Wireless Optus accepting the $A5.10 bid on Thursday and then this afternoon we understand that AAPIS, who own 17 per cent of AAPT, have also accepted the bid. So Telecom stands at 69 per cent of AAPT and could well get materially more than that. I think that's making people a bit nervous," he said.

"On the upside Contact Energy was quite strong - up 7c at 346c - on reasonable volume There is ongoing speculation that Edison Mission would take out some more or all of Contact. And Tranz Rail were up (10c to 348c) on the back of their good result."

The NZSE-40 capital index closed down 14.33 points, or 0.69 per cent, at 2063.55. Smaller companies, in contrast, firmed with their index up 14.96 at a year high of 5324.05.

AMP, battered midweek by news of more losses at GIO, slipped 5c to $19.25, and Tower was taking more hits with its head shares off 8c at 550c and the partly paids 15c at 310c. Telstra shares and receipts were both off 15c at 970c and 605c respectively.

Guinness Peat, which on Thursday said it was interested in lifting its stake in Otter Gold to 51 per cent, added 1c to 152c and the miner was up 1c at 96c. Another recent focus of GPG's attention, Wrightson, was 1c better at 42c after the rural services company said it had been in talks with an alternative suitor.

The highlight of the morning was a pre-market trade of 9 million Montana shares at the unchanged price of 204c, worth $18.4 million conducted by Merrill Lynch. The trade represents 4.2 per cent of the company. There have been constant rumours around the stock and that chairman Peter Masfen wants to lighten his 20.8 per cent holding.

NZPA