Of Bulls & Bears

Friday 2nd February 2001

Emerald strikes gold with oil

Emerald Capital is proving a canny investor. The Canadian investment company has an exposure to several prominent private companies through Direct Capital, the former listed investor that Emerald took over a few years ago. One of its recent deals was buying 20% of Ryman Healthcare when it listed in mid-1999, a deal with which it has so far seen a 42% paper gain. The latest scoop was its purchase of Fletcher Challenge's 14.3% stake in New Zealand Refining last October. Emerald paid only about $10 a share but since October NZ Refining's share price has taken off, rising to more than $15 this week. That equates to a $17 million profit for Emerald in just four months.

Major investors AOK with AQL

Long-suffering investors in cashed up company AQL Holdings (formerly aquarium owner Aquaria 21) are taking some comfort that prominent major shareholders investors like Eric Watson, Peter Masfen and the McCollam family have not bailed out. Despite the company's collapse in price from 19.8c a year ago to about 2c this week, there has been remarkably little movement in share holdings. Everyone now appears to be waiting to see what the company does next. The share price jumped 39% to an impressive 2.5c in the week to January 17 in anticipation of an announcement. However, hopes have been dashed for now. The company said on Wednesday it was still "actively pursuing and evaluating new opportunities." Investors reacted by marking shares back down below 2c. For those hoping to recover their investment, it is worth noting that AQL Holdings has to rebound by 890% just to get back to its yearly high.

Here's hoping for NCM hoopla

It's too early to say whether the Stock Exchange's fledgling New Capital Market is a resounding success, but at least it has put 11 new companies in front of investors. Without those, last year would have been rather dull for anyone looking for new investment opportunities. Ferdinand hears that several more floats are being planned and hopes their success rate is higher than their predecessors. Of the 11 companies to have come through the NCM process so far, only five were trading at above their offer price this week. NCM shares are unashamedly high risk and investors know this. However, it would be good for everyone to see the market deliver some wealth in its early days to ensure sustained interest.

VTL goes vertical

Those brave souls who bought into Vending Technology's October float will be celebrating their acumen - the shares have since seen an almost unbroken rise and, at 230c, are 92% up on the 120c issue price. Quite why this should be is a bit of a mystery. The September half-year profit of $1.25 million was, as you'd expect, in line with the prospectus forecast. Given that the second half is likely to be even stronger ("people get thirsty over summer," chairman Richard Janes explained) VTL should have no trouble making its $3.14 million full-year forecast. All eyes are now on Australia, where the company has won three preferred-supplier contracts.

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