MARKET CLOSE: NZ shares edge higher; Fletcher gains, Contact falls

BUSINESSDESK: New Zealand shares rose, snapping a two-day slide off a nine-month high, as Fletcher Building was anointed as a more dominant listing on the NZX, while Contact Energy fell on the proposed re-weightings that will relegate the power company because of Origin Energy's half stake.

The NZX 50 Index rose 1,04 points, or 0.03 percent, to 3487.01. Within the index, 20 stocks rose, 18 fell and 12 were unchanged. Turnover was $72 million, lighter than in the past week.

Fletcher, whose weighting on the NZX's indexes will strengthen with the exchange operator's changes to how it treats large shareholders, rose 2.1 percent to $6.92.

The change effective in June is based on the "pure free float" methodology. That measure excludes stock tied up by a major shareholder, such as the 52.4 percent stake in Contact Energy owned by Australia’s Origin Energy.

Contact fell 2.1 percent to $4.68. Its weighting in benchmark indexes will drop to 4.58 percent from 8.7 percent under the current rules.

Among other companies affected, Sky Network Television, in which News Corp has just short of a controlling stake, fell 3 percent to $5.10.

"I guess there is less reason for people to hold some of these stocks," said Greg Easton, advisor at Craigs Investment Partners. "The volumes aren't huge. There isn't a huge institutional shift going down. We will start trading on the fundamentals again."

Trade Me, the popular auction website spun off in an IPO by Australia's Fairfax Media last year, again charted a new high, rising 0.9 percent to $3.49.

"It's a strange one, there is no news," Easton said. "People are just buying into the story now. Their first result is now out of the way and people are starting to see they should be there."

Heritage Gold soared 17 percent to 2.1 cents. The company said the Talisman prospect, near its Waihi Martha mine, is looking like a major commercial discovery, based on figures released today showing the mine breaks even at A$1,000 an ounce for gold, well below current gold prices.

The findings follow a review of a scoping study review for the Talisman resource, on the North Island’s Coromandel Peninsula, and concluded “a potentially very robust and highly profitable gold mine” exists at the undeveloped site.

Kathmandu, the outdoor equipment chain, was unchanged at $1.89. The company is due to post interim results tomorrow.

"The result will very much be a snapshot in time," Easton said. "They have been up and down and because they are a dual-listed they are treated harsher. If they disappoint they will get hammered."

Pumpkin Patch, which sells children's clothing and took harsh medicine by way of charges to close stores in the US and UK , climbed 7.1 percent to $1.05, leading the NZX 50 higher.

"I think people are buying with confidence that they have a future now," Easton said.