Job cuts arrived "a lot quicker than most people thought". Photo / Dean Purcell
Job cuts arrived "a lot quicker than most people thought". Photo / Dean Purcell
Index hits record high as market approves cost-cuts and shrugs off smelter fears.
New Zealand shares rose on Thursday, rounding out a 6.9 per cent quarterly gain for the NZX 50. The rise followed Telecom's announcement of plans to cut as much as $110 million in annual costs and Contact Energy shrugged off worries Rio Tinto may shut its aluminium smelter, denting powerdemand.
The NZX 50 rose 10.69 points, or 0.2 per cent, to a record high of 4422.75 on the final day of the first quarter. Within the index, 27 stocks rose, 18 fell and five were unchanged. Turnover was $136.9 million.
Telecom rose 0.9 per cent to $2.34 and was the most heavily traded stock by value after saying it would slash as much as $110 million a year in costs by cutting up to 1230 jobs.
Job cuts had been flagged though they have arrived "a lot quicker than most people thought," said James Lee, head of institutional equities at First NZ Capital. "Lower costs equal higher profits" though the news was already partly in the share price."
Chorus, the network company split off from Telecom in 2011, fell 1.4 per cent to $2.81.
Contact Energy ended the day up 0.5 per cent to $5.70 after the Government said it was in direct talks with Rio Tinto over the price of power Meridian Energy supplied to the Bluff smelter.
This calmed concerns the resources giant could pull the plug on a plant that consumes a seventh of the nation's electricity.
"The response in the market shows there's not a lot of fear - the issues are well understood," Lee said.
Bathurst Resources rose 2.5 per cent to 41c after the would-be coking coal miner said it had gained tentative approval from the Environment Court for it to go ahead with its Escarpment Mine project on the West Coast's Denniston Plateau.
Fonterra Shareholders' Fund notes rose 0.5 per cent to $7.49 a day after the dairy company lifted its forecast milk payout because of strong global dairy prices.
Auckland International Airport rose 0.9 per cent to $2.945 and Fisher & Paykel Healthcare fell 1.9 per cent to $2.62.
Fletcher Building, the biggest company on the NZX 50, slipped 0.1 per cent to $8.57.
Ryman Healthcare gained 0.6 per cent to $5.04 and Summerset Group rose 1.6 per cent to $2.62.
Steel & Tube Holdings rose 2.7 per cent to $2.68, leading the index higher on the day. Auction website Trade Me gained 2.2 per cent to $4.73.
