Stocks to watch: AFP, AIR, CEN, FPA, LME, PGC, WHS
Dec. 17 (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 equity markets extended their gains after stronger U.S. economic data boosted risk sentiment. Official numbers showed initial jobless claims dropped 3,000 to a seasonally adjusted 420,000, October's housing starts were revised up to a 534,000-unit pace, and the Philadelphia Federal Reserve survey beat expectations. In late afternoon trade the Standard & Poor's 500 Index rose 0.4% to 1,240.97, while in Europe the Stoxx 600 rose 0.4% to 277.59 at the close. The New Zealand dollar held below 74 U.S. cents, and was last at 73.75 U.S. cents from 73.91 cents yesterday.
Air New Zealand Ltd. (AIR): The national carrier rose 1.4% to $1.45 in the wake of the Australian antitrust regulator's decision to approve its alliance with Virgin Blue on the highly competitive trans-Tasman route. The airlines won the regulator and several business groups over by agreeing to code-share on the route, connect domestic flights and offer reciprocal frequent flyer and lounge access agreements.
Allied Farmers Ltd. (ALF): The rural services company which took over the Hanover Finance Ltd. loan book in a failed bid to become a major lender had legal papers served against it by Hanover over its refusal to pay $5 million as part of the companies’ debt-for-equity swap. Allied insists it was entitled to cancel the payment, claiming Hanover breached the terms of their agreement in some of the last transactions before the swap. The shares rose 10% yesterday to 2.2 cents.
Contact Energy Ltd. (CEN): The country's third biggest listed company received the required approvals for its Ahuroa underground gas storage facility at Stratford to go into operation, the first such facility in New Zealand. The development will restore portfolio flexibility lost two years ago with the failure of all but one pole of the Cook Strait cable. The shares fell 0.1% yesterday to $6.19.
Fisher & Paykel Appliances Holdings (FPA): The whiteware manufacturer has revised its earnings guidance for its appliances business unit due to deteriorating retail trading conditions. Full year earnings before interest and taxation are now expected to be between $15 million and $25 million, compared to a forecast of $28 million to $35 million previously. The shares were unchanged at 57 cents yesterday.
L&M Energy Ltd. (LME): The coal seam gas explorer and Australian-based Mosaic Oil NZ have been granted a five-year petroleum exploration permit for the 6sq km onshore Taranaki Kahili block. The award, in which the company owns a 25% stake, will give it three permits in New Zealand’s only commercially proven producing basin. The shares were unchanged yesterday at 12.5 cents.
Pyne Gould Corp. (PGC): The financial services company is one step closer to becoming a listed South Island bank after the High Court okayed the merger between its Marac Finance unit and Canterbury and Southern Cross Building Societies. Building Society Holdings Ltd., the registered name of the so-called “Heartland” bank, is expected to be launched in early January followed by a listing on the NZX in February. The shares were unchanged yesterday at 38 cents.
Warehouse Group (WHS): New Zealand's biggest listed retailer is expected to face challenging market conditions this Christmas after weakening consumer confidence figures cast a pall on the key earnings period. The Westpac McDermott Miller Consumer Confidence Index fell 5.8 points to 108.3, based on the survey conducted between Dec. 1 and Dec. 14. For a second year, the December quarter survey quizzed kiwis on their Christmas gift spending intentions, and the results showed the median consumer plans to spend a net 36% less on presents than they did last year, at a total of $413. The shares fell 2.5% yesterday to $3.52.