Stocks to watch: NZO, NZR, PGG, SCT, TEL, TLS, XRO
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: New Zealand markets are set to close the pre-Christmas week with a bang, with gross domestic product and current account data due for release and expected to show tepid economic growth and a growing balance of payments deficit as a percentage of GDP. The New Zealand dollar fell back below 74 U.S. cents as Moody’s Investors Service slashed Ireland’s credit rating five notches, sparking fresh concerns about Europe’s sovereign debt crisis, and was last trading at 73.52 U.S. cents from 74.06 cents on Friday in New York. U.S. equity markets continued their rally last week, with the Standard & Poor's 500 Index up 0.3% to round out its third week of gains.
New Zealand Oil & Gas Ltd. (NZO): The energy exploration and production company has begun to trade on fundamentals again now that NZO's stake in failed miner Pike River Coal has been priced in, said Rickey Ward, domestic equities manager for Tyndall Investment Management. Oil prices were last at US$92.06, holding near a 5-year high. The shares were unchanged at 86 cents on Friday.
NZ Refining Co. (NZR): Shares in New Zealand's only oil refinery rose 7.8% on Friday to $4.42 after the company said net profit for the calendar year will be in the range of $55 million to $65 million, up from $23.6 million in 2009 on better than expected margins. The average refining margin earned in the 10 months ended Oct. 31 was US$6.03 and since then has tracked in a range of US$6 to US$7.50.
PGG Wrightson Ltd. (PGW): The rural services company revised its earnings forecast downwards, citing the slow recovery in the agricultural sector, the disposal of the NZ Farming Systems management contract and increased debt provisioning. Earnings before interest tax depreciation and amortisation for the year are forecast to come in at between $58 million to $61 million, compared to an EBITA of $70.5 million last year. Full year net profit is expected at between $15 million and $18 million, compared with $23 million previously. Shares fell 8.3% on Friday to 44 cents.
Scott Technology Ltd. (SCT): Forty employees at the mining equipment manufacturer walked out on strike last week. The dispute centres around workers' demand of a 3.5% increase backdated for one year versus the company's offer of a 2% increase with no backdating. The shares fell 1.5% on Friday to $1.35.
Telecom Corp. (Tel): New Zealand's biggest telephone company has started preparing to split its business, a move the company promised to make if it won the tender to build government's ultrafast broadband network. Last week the company reserved the names Chorus Group and Chorus Fibre with the Companies Office. The shares rose 2.8% on Friday to $2.23.
Telstra Corp. (TLS): The Australian telephone company's claim that its directories are protected by copyright was rebuffed by an Australian court last week. The ruling means that the data is now potentially open to outside parties, and could have ramifications in New Zealand, according intellectual property lawyer Stuart Bradshaw, quoted in the Stuff website. Shares rose 1.4% on Friday to $3.71.
Xero Ltd. (XRO): The maker of online accounting software announced last week that businessman Sam Knowles would be joining its board. Knowles, who headed Kiwibank for ten years, replaces Guy Haddleton, who has served as a director since March 2007 and was part of the team to lead the company through the sharemarket listing process. Shares fell 0.4% on Friday to $2.38.