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NZ Sharemarket's Slow Day As Telecom's XT Drama Drags On

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Feb 23 NZPA - Telecom's woes with its XT network dominated the New Zealand sharemarket in what was generally a flat day.

Overall, the benchmark NZX-50 index ended the day down 3.387 points, or 0.1 percent at 3126.367.

Turnover of 27.4 million stocks was worth $59.3 million. There were 37 rises and 36 falls.

The big story of the day was Telecom, which dominated the day. Five times as many Telecom stocks were traded as the next highest, AMP Office.

"It is the ongoing PR battle over XT, but the announcement they came out with today was pretty significant and we saw some financial impact," said Craigs Investment Partner's research analyst Mark Lister.

The company said its compensation package for affected XT users would cost $10 million. It also changed its earnings forecast for the full year from the "bottom half" of a $400m to $440m range to the "lower end".

"The market is probably reading a bit into it," Mr Lister said and shares fell 6c, or 2.54 percent, to 230.

Apart from Telecom it was "basically a flat market", although a couple of property stocks rebounded after a weak run following speculation on changes to property tax rules, he said.

Contact Energy today said its underlying earnings after tax for the half year were up just 0.3 percent from a year earlier to $80.1 million, as high hydro inflows resulted in low wholesale prices. Shares dropped 8c to 572.

Other stocks to lose ground were; Infratil, down 1c to 160, Hallenstein Glasson less 5c to 350 and Freightways, dropping 6c to 296.

Kiwi Income Property Trust unchanged at 98.

A number of stocks rose today, including Nuplex, up 7c to 340, AMP Office Trust, gaining 2c to 73 and Auckland Airport, lifting 1c to 189.

Fletcher Building was up 5c to 785, Sky City Entertainment earned 4c to 324 and Sky TV also lifted 4c, to 486

Goodman Property was up 2c to 101, Fisher & Paykel Appliances rose 1c to 61 and Air New Zealand was up 1c to 134.

In Japan, the Nikkei 225 stock average fell 68.96 points, or 0.7 percent, to 10,331.51 Shares of Toyota Motor Corp. lost about 1 percent, in line with the broader market's losses, a day after disclosing it was the target of US criminal and regulatory investigations in connection with its recent safety problems.

In the US Monday, the Dow fell 18.97, or 0.2 percent, to 10,383.38. The Standard & Poor's 500 index fell 1.16, or 0.1 percent, to 1108.01, while the Nasdaq composite index fell 1.84, or 0.1 percent, to 2,242.03.

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