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Firm start by NZ sharemarket

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Fuseworks Media
Fuseworks Media

Wellington, Feb 4 NZPA - Shares in farming services company PGG Wrightson rose in early trading after news of a possible second bidder, while Tourism Holdings (THL) fell sharply after advising the market of a "sudden and severe" revenue drop last month.

PGG Wrightson, the subject of a partial takeover bid by shareholder Agria, today said it had been approached by another "bona fide potential bidder" and had agreed to a request from the party to carry out due diligence.

Shares in the company opened up 4c, but within a few minutes the gain had been cut to 2c, taking the share price to 57.

THL shares were down 14c, or 19 percent, to 60 early, after the company said it did not expect to be in compliance with banking covenants in the March 2011 quarter, and cut its full year forecast to a $4 million loss from a $2.5 million net profit previously forecast.

A severe and sudden drop in revenue intakes -- forward bookings -- during the key January booking month had created significant uncertainty for the rest of the financial year, THL said.

The broader market started the day firmly, with the benchmark NZX-50 index up 10.13 points to 3360.02 around 10.15am, having slipped 2.4 points yesterday.

Among leading shares, Telecom gained 3c to 223, and Fletcher Building lifted 4c to 795, but Contact Energy fell 3c to 619.

Sky TV rose 2c to 535, and NZ Refining Co added 2c to 495, while Sky City was down 2c to 335.

In the United States, stocks ended near session highs, with investors favouring shares of retailers after encouraging chain-store sales raised confidence.

Based on the preliminary data, the Dow Jones industrial average gained 0.2 percent at 12,062.18, the Standard & Poor's 500 Index was up 0.2 percent at 1307.10, and the Nasdaq Composite Index was up 0.2 percent at 2753.88.

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