Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Chorus shares rally on Milford and ACC backing

Chorus shares rally after vote of confidence from Milford, ACC ups stake

By Paul McBeth

Dec. 13 (BusinessDesk) - Shares in Chorus climbed 8 percent in early trading after Milford Asset Management yesterday said the regulatory uncertainty hanging over the network operator was fully priced in, and the investment arm of the Accident Compensation Corp lifted its holding in the telecommunications company.

The stock rose as high as $1.50, and recently traded at $1.48, up 11 cents from yesterday, having plunged by more than half their value over the past year as the Commerce Commission looked to force a sharper cut to its regulated prices for copper line access than it had previously anticipated.

The rally comes after Milford Asset Management portfolio manager Mark Warminger said the uncertainty having over Chorus was fully priced in and the liquidity of the stock caused by the sell-off from international investors gave buyers an opportunity to get a discount.

“These are the main attributes I look for in a deep value investment,” he said in the note.

Milford isn’t the only local fund manager attracted to the stock, with ACC buying another 500,000 shares at about $1.34 apiece on Dec. 11, lifting its holding in Chorus to almost 7.2 percent from 6.2 percent, according to a notice to the NZX.

The local backing for Chorus is in contrast to the Bank of New York Mellon quitting its substantial holding in the company last week by reducing its stake to 4.9 percent.

Chorus has warned its annual earnings before interest, tax, depreciation and amortisation may be cut by up to $148 million from a raft of price regulations to its copper network, about a quarter of its $654 million annual earnings in the 2013 financial year.

Communications Minister Amy Adams is expected to receive a written report from Ernst & Young Australia today on whether Chorus has the financial capacity to withstand the regulated price cuts.

EY’s preliminary view, in a verbal briefing for Ministers last week, was that there’s a risk Chorus can’t meet its contractual obligations if the cuts go ahead without any further action.

The government lost its ability to legislate away the problem after its support partners declared they would not back re-writing the law, effectively limiting Adams' options.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>


Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>


Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>


Prices Up, Volume Down: March NZ House Sales Drop 10% As Loan Curbs Bite

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank’s restrictions on low-equity mortgages continue to weigh on sales of cheaper property. More>>


Scoop Business: Chorus To Appeal Copper Pricing Judgment

Chorus will appeal a High Court ruling upholding the Commerce Commission’s determination setting the regulated prices on the telecommunications network operator’s copper lines. More>>



Cars: Precautionary Recalls Announced For Toyota Vehicles

Toyota advises that a number of its New Zealand vehicles are affected by a series of precautionary global recalls. Toyota New Zealand General Manager Customer Services Spencer Morris stressed that the recalls are precautionary. More>>


'Gardening Club': Air Freight Cartel Nets Almost $12 Million In Penalties

The High Court in Auckland has today ordered Swiss company Kuehne + Nagel International AG to pay a penalty of $3.1 million plus costs for breaches of the Commerce Act. Kuehne + Nagel’s penalty brings the total penalties ordered in this case to $11.95 million ... More>>


Crown Accounts: Revenue Below Projections

Core Crown tax revenue has increased by $1.9 billion (or 5.0%) compared to the same time last year. However this was $1.1 billion less than expected and is reflected across most tax types, continuing the pattern of recent months. More>>


Get More From Scoop

Computer Power Plus
Search Scoop  
Powered by Vodafone
NZ independent news