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Stocks to watch: Allied, Cynotech, Fletcher, NZX

Stocks to watch: Allied, Cynotech, Fletcher, NZX

Dec. 22 (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: Shares rose in the U.S. and Europe amid optimism the global recovery is gathering pace. Government figures today are expected to show New Zealand’s current account deficit shrank to 3.9% of gross domestic product. The kiwi dollar sank to a three-month low.

Allied Farmers (ALF): The shares sank 32% to a new record low 10 cents yesterday after the company issued 1.9 billion shares to former investors in Hanover Finance and United Finance at 20.7 cents apiece. Some 8.69 million shares changed hands yesterday, the heaviest ever trading day, amounting to about a fifth of its existing shares on issue.

Comvita Ltd. (CVT): The developer of products based on the medicinal properties of honey yesterday announced it has concluded a global licensing deal for its Medihoney products with Princeton-based Derma Sciences Inc. for US$4.25 million in cash and stock, and ongoing royalties. The shares rose 5.5% to $1.35 yesterday.

Cynotech Holdings (CYT): The finance, satellite and manufacturing group tumbled 17% to 9 cents yesterday after Cynotech Securities, a company associated with major shareholder Allan Hawkins, on Friday made an offer to acquire the company in exchange for preference shares in Cynotech Securities that pay 8% annual interest. Each CSGL preference share has an attributed value of 13.5 cents, the company said.

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Fletcher Building (FBU): The nation’s biggest construction company was raised to ‘neutral’ from ‘underperform’ by First NZ Capital analyst Kar Yue Yeo, according to the ShareChat website. The analyst has a share price target of $8.40 and expects a recovery in activity to mid-cycle levels in the June 2012 year. The shares rose 4 cents to $7.70 yesterday.

Infratil Ltd. (IFT): The investment group and the Guardians of NZ Superannuation yesterday said they have signed a letter of intent with Royal Dutch Shell Group to acquire the oil company’s downstream assets in New Zealand.The letter doesn’t constitute a binding agreement though it does “represent Infratil and the Guardians’ clear intention to proceed.” The shares fell 1.2% to $1.63 yesterday.

NZX Ltd. (NZX): The country’s stock exchange operator may find its April purchase of the MCo electricity trading business isn’t quite what it needs if Energy Minister Gerry Brownlee’s electricity reforms proceed as planned. EnergyHedge, operated under contract by NZX for the big five local power companies, is assessing options for an upgraded hedge market, which will require clearinghouse facilities which NZX does not currently have. That may be an opportunity for arch-rival the Australian Securities Exchange to provide its clearing house solution by next June’s deadline. NZX shares rose 14 cents yesterday to close at $8.85.


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