Stocks to watch: NZX rights issue, Telstra, Nuplex, Postie Plus

Monday 11th May 2009

The following stocks may be active on the New Zealand exchange after developments since the close of trading Friday.

Themes of the day: Shares rallied in the US and Europe, led by financials, as the results of the stress tests on U.S. banks were deemed not as bad as feared and after the world’s biggest economy shed less-than-expected jobs last month. The Standard & Poor’s 500 climbed 2.4%. Crude oil rose on the prospects of the global economic slump abating.

Air New Zealand (AIR): The national carrier is reviewing its regional network as demand dwindles on some routes, the Dominion Post reported. “If in the end we can't get loads, we really do need to pull out of locations, said the carrier’s head of short-haul services, Bruce Parton. A review would cut duplication from regional units Eagle Air, Air Nelson and Mount Cook Airline, according to the report. The stock rose 2 cents to $1.07.

New Zealand Oil & Gas (NZO): Crude oil for June delivery gained 3.4% to US$58.63 a barrel on the New York Mercantile Exchange. Crude could reach US$62.65 a barrel soon and rise to US$78 within six months, according to technical analysis from PVM Oil Associates, Bloomberg reported. If oil reaches $62.65, the equivalent to 38% of its 10-year rally, so-called Fibonacci sequences indicate it will add to its gains, according to the report. In New Zealand, Energy Minister Gerry Brownlee said this year’s budget will include $20 million over three years to fund a seismic surveys to bolster exploration activity. The stock rose 1.4% to $1.48 on Friday.

Nuplex Industries (NPX): Businessman Peter Masfen lifted his holding in the specialty chemicals maker to 4.4% by partaking in the company’s rights issue and via on-market purchases, the Sunday Star Times reported. The shares fell 2.5% to 39 cents on Friday.

NZX (NZX): The stock exchange operator plans to raise $20.55 million via a pro-rate renounceable rights issue and said it has signed a bank facility with ASB Bank as it prepares to fund three acquisitions in the past month - the energy and related assets of M-co, Country-Wide Publications and 50.1% of Australia’s NSX. The issue is one share for every five held at $4 apiece. NZX shares rose 0.1% to $7.74 on Friday, the highest since June last year, and have climbed 42% this year.

PGG Wrightson (PGW): Forsyth Barr analyst John Cairns values the shares at $1.59, according to the ShareChat website. The shares fell 5 cents to $1.56 on Friday. “Trading conditions are mixed with a generally favourable commodity price outlook and growing conditions offset in part by a weakening in farmer confidence levels due to concerns over the outlook for the global economy,” Cairns said, according to the report. The average rating on the stock is ‘hold,’ according to Reuters. One analyst rates it a ‘buy,’ three says hold the stock, one has it at ‘underperform’ and one recommends selling the stock.

Postie Plus Group (PPG): The clothing chain today reported a 7.3% gain in third-quarter sales and said its margins widened, bringing the company closer to a return to profitability, said managing director Ron Boskell. The shares were unchanged on Friday at 30 cents.

Telstra Corp. (TLS): Australia’s biggest phone company dropped 4.2% to $4.10 on Friday after Chairman Donald McGauchie resigned and was replaced by Catherine Livingstone, while David Thodey was named new CEO, replacing Sol Trujillo.

Xero (XRO): The online accounting systems company said it entered a reseller agreement with the UK's British Telecom Group. Xero will offer its service to BT’s 1.7 million small business customers via their business applications service portal. The service will begin from July. The shares rose 1 cent to $1.30 on Friday.

Businesswire.co.nz

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