Stocks to watch: AIR, CEN, GFF, KIP, SAT, SKT, WBC
Dec. 2 (BusinessDesk) – The following stocks may be active on the New Zealand exchange after developments since the close of trading. All prices are in New Zealand dollars unless specified.
Themes of the day: Global markets rose as positive manufacturing data out of the U.K and China, improved employment payroll numbers in the U.S. and an increase in German consumer spending saw investors' appetite for risk return. Concerns over Europe's sovereign debts were also eased amid speculation that the European Central Bank could step-up its program of sovereign bond buying. Milk prices rose 1.6% to US$3,594 a tonne on Fonterra’s globalDairyTrade platform, with most gains in the longer contracts. The kiwi dollar rose to 74.90 U.S. cents from 74.48 cents yesterday. New Zealand’s commodity prices climbed to a new high as 10 of the 15 measured raw materials in the ANZ Commodity Price Index gained in November, led by a surge in the price of pelts and skins. The index rose 4.5% to 296.2 as the world price for pelts climbed 32% last month to a 13-year high. Oil rose to a two-week high, with Brent Crude last trading at US$87.63 a barrel.
Air New Zealand Ltd. (AIR): The national carrier has expanded its court case against the partial sale of the Queenstown airport to include proceedings against the company's directors. The airline claims they acted illegally when they sold a 25% stake in the airport to Auckland International Airport Ltd. for $27.7 million, which was previously owned by the Queenstown City Council. Shares were unchanged yesterday at $1.38.
Contact Energy Ltd. (CEN): The environmental court approved all the consents and turbine locations for the utility's proposed Waitahora wind development. The proposed project in the Puketoi Range, southeast of Dannevirke, would generate enough electricity for up to 70,000 homes. Share rose 0.8% yesterday to $5.98.
Goodman Fielder Ltd. (GFF): The food ingredient manufacturer's costs have come under pressure from rising input prices and a wet season in Australia which had hurt wheat crops, according to Shane Solly, a portfolio manager at Mint Asset Management. New Zealand’s commodities climbed to a new high as 10 of the 15 measured raw materials in the ANZ Commodity Price Index gained in November. The index rose 4.5% to 296.2. Shares fell 2.8% yesterday to $1.77.
Kiwi Income Property Trust (KIP): The property investor has agreed to buy Auckland’s LynnMall Shopping Centre from AMP Capital Property for $174 million, subject to Overseas Investment Office approval. The acquisition will be funded from existing bank debt facilities, lifting the trust’s net bank debt gearing ratio by 6% to about 31%. The trust’s units were unchanged yesterday at $1.
Satara Cooperative Group (SAT): The kiwifruit grower and Eastpack Ltd. called off their proposed merger after Eastpack’s credit lines dried in the wake of the Pseudomonas syringae pv actinidiae, or vine canker, outbreak on the North Island. Satara's board said is confident it pursued all avenues to keep the deal afloat, but wasn’t able to achieve this. Shares resumed trading at $1 after the trading halt imposed ahead of the announcement was lifted.
Sky Network Television Ltd. (SKT): The pay television operator's new iSky.co.nz service could add an estimated $10 million a year to revenue, according to Forsyth Barr's Rob Mercer, quoted on the ShareChat website. He estimates that the online portal, due to be launched in December, is expected to draw 8,000 new movie subscribers, 20,000 new multi-room subscribers and an increase in pay-per-view content. Shares fell 0.2% yesterday to $5.18.
Westpac Banking Corp (WBC): The lender's New Zealand unit is looking to raise $8.8 billion in cheaper funding from foreign investors using mortgages as security, according to press reports. The first issue of the covered bonds is expected in the first quarter of 2011, although no term has been set. Shares fell 0.9% yesterday to $27.36.