Market close: NZ shares up - Telecom lures investors, Summerset rises

BUSINESSDESK: New Zealand shares rose, led by Telecom, as investors were attracted to its dividend yield, ongoing share buyback and improving global sentiment for the sector. 

Summerset gained after the retirement home operator gave an upbeat outlook at its annual meeting.

The NZX 50 Index rose 6.4 points, or 0.2%, to 3519.85. Within the index, 16 stocks rose, 20 fell and 14 were unchanged.

Turnover was $82 million.

Telecom gained 3.1%to $2.63, the highest since the spinoff of its Chorus network business in November.

The stock has a dividend yield of 11.7%. Chorus was unchanged at $3.41.

"Telcos around the world are a little bit more in focus," Adrian Vance, a director at brokerage Hamilton Hindin Greene, said.

Telecom "has very nice dividends, it is getting its house in order and it has its $300 million buyback under way".

Telecom announced on February 24 that it planned an on-market buyback this year to acquire a maximum of 200 million ordinary shares for an aggregate purchase price of not more than $NZ300 million.

Telstra, Australia's biggest phone company, rose 1.6% to $4.36 on the NZX today.

Cavalier, the carpet and wool scouring company, was unchanged at $1.77, having tumbled from $2.13 before its profit warning last week, which it had said reflected weak trading conditions in Australia and New Zealand and costs it will take against its broadloom carpet business.

"The company is going to have to prove itself before we see much upside in the share price," Mr Vance said.

Nuplex Industries, the specialty chemicals company, rose 1.9% to $2.70.

Summerset rose 0.6% to $1.65, the highest since the retirement home operator that went public in October.

Chief executive Norah Barlow told shareholders today that the company is making $60m of investment in new units and is on track to meet its target of 155 units in 2012.

The company said it is trading well and meeting its forecasts.

Rakon, which makes components for navigation systems and smart phones, fell 4% to 47 cents and was the biggest decliner on the NZX 50.

OceanaGold, the operator of the Macraes gold field, extended its slide by 2.7% to $2.84 as the price of gold fell to $US1634.46 an ounce, the lowest in about three weeks.

Fletcher Building, the construction and building products group, rose 0.3% to $6.19. Contact Energy fell 1.1% to $4.73.

Among retailers, Kathmandu gained 1.2% to $1.72, while Michael Hill International fell 0.9% to $1.05 and Hallenstein Glasson Holdings dipped 1.3% to $3.85.

Warehouse Group, the biggest retailer on the NZX 50, fell 0.4% to $2.62 and has dropped about 12% this year.