Stocks to watch: Air NZ, Contact, Infratil, Westpac

Nov. 4 (BusinessWire) – The following stocks may be active on the New Zealand exchange after developments since the close of trading yesterday. All prices are in New Zealand dollars unless specified.

Themes of the day: Prices jumped 14% in Fonterra’s latest online milk powder auction, suggesting global demand for dairy products has recovered and stoking optimism for the contribution dairying will make to the New Zealand economy. The Reserve Bank of Australia raised its benchmark interest rate a quarter point to 3.5% yesterday while indicating further increases may be gradual. Shares on Wall Street were mixed as Warren Buffett’s Berkshire Hathaway announced it would buy railroad Burlington Northern Santa Fe, boosting transport-related stocks, while financial fell after Switzerland’s UBS AG posted a bigger-than-expected loss.

Air New Zealand Ltd. (AIR): The airline announced yesterday it will replace its domestic Boeing Co. 737 aircraft with Airbus A320’s, taking advantage of the global airline slump to pick up planes at more favourable rates. The shares rose 1.6% to $1.30 yesterday.

Contact Energy (CEN): The biggest utility on the NZX 50 said it spudded a new gas injection well at its.$250 million Ahuroa underground natural gas storage facility near Stratford. Contact has been injecting gas into the field at the rate of around 40 terajoules per day since a new compressor was installed last month, managing director David Baldwin said. The shares dropped 8 cents to $6.10 yesterday.

Infratil Ltd. (IFT): The shares fell 3.6% to $1.59 yesterday, leading the index lower, after the investment group said it has teamed up with the New Zealand Superannuation Fund for exclusive talks over the possible acquisition of Shell’s local refining and downstream businesses. “The market is saying, are Shell the sort of people that are likely to give you a bargain – the answer may be no,” said Alan Moore, who helps manage $350 million at Milford Asset Management.

Shell owns 17.1% of New Zealand Refining (NZR), the nation’s only oil refinery, which fell 1.7% to $5.11 yesterday.

NZ Farming Systems Uruguay (NZS): The price of milk powder surged for its fourth straight month in Fonterra Cooperative Group’s online auction. The average price of milk powder climbed almost 14% to US$3,437 per metric ton, according to globalDairyTrade website. The developer of dairy farms in South America was unchanged at 44 cents yesterday.

NZ Windfarms Ltd. (NWF): The shares dropped 9.8% to 46 cents yesterday after the supplier of its turbines, Windflow Technology Ltd., said it was preparing to take court action to recover withheld payments of more than $3.5 million.

Westpac Banking Corp. (WBC): The lender’s New Zealand unit will appeal last month's billion dollar judgement against it in the High Court, which found that four representative structured finance transactions between 1998 and 2005 constituted tax avoidance. The NZX-listed shares of the Australian lender fell 45 cents to $31.90 yesterday.

(BusinessWire)