Telecom shares split in two yesterday and - to the relief of thousands of local shareholders - traded well enough that the sum of the parts were worth more than the single stock that closed for the last time on Tuesday.
Chorus, Telecom's soon to be independent infrastructure arm, opened trading at $2.94 and climbed 9.2 per cent, closing at $3.21.
Telecom opened at $1.937, with a fifth of its value removed to reflect Chorus' stand-alone listing, and closed at $2.025, up 8.8c.
Stockholders received one Chorus share for every five Telecom shares they owned.
Using analyst calculations, the combined value of Telecom and Chorus' share prices was $2.667 at the end of trading yesterday.
This was higher than Telecom's closing share price of $2.525 on Tuesday although still lower than the 52-week high of $2.79.
Hamilton Hindin Greene director Grant Williamson said the performance of both companies was "good for Telecom shareholders".
"If you look at the overall value pre-split to post-split there has been some improvement," he said.
"They had a pretty good day when the market didn't really do too much."
The NZX-50 closed at 3269, up 0.5 per cent.
Although "reasonable volumes" of Telecom and Chorus shares had been traded yesterday, Williamson said he expected this to pick up as both companies released forecasts.
Forsyth Barr analyst Guy Hallwright said Chorus had a stronger debut on the local market than across the Tasman.
Craigs Investment Partners' Geoff Zame said it was too early to tell whether the demerger had created value for shareholders.
"It will take time for the different characteristics of each of those businesses, because they have very different characteristics, for the market to determine how they want to value them," Zame said.
"The key issue really is what level of confidence the market will have in Chorus' ability to retain earnings and execute on the [ultra-fast broadband scheme].
"There is an information vacuum, frankly, in respects to both companies, which in effect have transitory boards, and no formal guidance.
"These things will resolve themselves over the next six weeks I imagine as [Chorus and Telecom] both come out with their own statements around earning expectations," he said.
The separate listings yesterday came in anticipation of Telecom and Chorus' demerger, which is due to be completed on November 30.
This will see Chorus become a separate public company to take part in the Government's ultra-fast broadband scheme and roll out high-speed fibre internet cables in 24 towns and cities across New Zealand over the next eight years.
The demerger is one of the biggest corporate shakeups in New Zealand history and has far-reaching implications for the local telecommunications industry.
Telecom will become a stand-alone retail business but keeps hold of its mobile network.
Chorus will be a wholesaler and own 130,000km of copper lines, more than 27,000km of fibre cables and more than 500 telephone exchanges.
* Chorus and Telecom now have separate listings on the NZX and ASX under the stock codes CNU and TEL.
* The two listings are in anticipation of the company's formal split, due to be completed on November 30.
* Stockholders got one Chorus share for every five Telecom shares they own.