Stocks to watch: Air New Zealand, Telecom, Pumpkin Patch

Friday 10th July 2009

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

Themes of the day: Leaders of the Group of Eight nations avoided a clash with their counterparts in major emerging economies over the suggestion to reduce the dominance of the greenback as the world’s reserve currency. The Dollar Index, which measures the greenback against currencies of six major trading partners, fell 1.1% to 79.87. Oil and metals revived as investors’ regained some of their risk appetite.

Air New Zealand (AIR): Virgin Blue Holdings, Australia’s No. 2 airline, said a joint venture with Delta Air Lines would cut costs and stem losses of routes across the Pacific Ocean. Air NZ shares fell 2 cents to 87 cents yesterday.

Australia & New Zealand Banking Group (ANZ): The lender said its share purchase plan met “outstanding support” from retail investors and it would now issue A$2.2 billion of ordinary equity at A$14.40 per share. More than 40% of the bank’s retail investors sought the shares, it said. The shares slipped 2.8% to A$15.85 on the ASX yesterday and were unchanged on the NZX at $20.10.

Infratil (IFT): The investment group’s IFTWB warrants expire today, with underwriting arranged by First NZ Capital for at least 68 million and other major shareholders committing to exercise about 30 million. Taken together with the potential sale of 32% owned Energy Developments in Australia, the company has room to repay debt and strengthen its balance sheet. The shares were unchanged at $1.66 yesterday.

New Zealand Oil & Gas (NZO): The oil company yesterday said it bought a 10% stake in the offshore Taranaki Hoki oil prospect, which is due for drilling this summer by NZOG's Tui field partner, AWE. "NZOG’s internal assessment is that Hoki has the potential to be a large oil-bearing reservoir," said managing director David Salisbury. The shares fell 0.7% to $1.51 yesterday.

Pumpkin Patch (PPL): The children’s clothing chain's decision to cut back unprofitable stores in the US still offers a platform for medium-term growth, says Warren Doak at Macquarie Equities, according to the ShareChat website. Macquarie rates the stock ‘outperform.’ The restructuring “is clearly an earnings and value-accretive restructuring," Doak said. The shares rose 0.7% to $1.50 yesterday.

Telecom Corp. (TEL): The phone company’s XT mobile network has added more than 100,000 customers since its launch five weeks ago but the arrival of the new network hasn’t sparked an exodus from rival Vodafone, the Dominion Post reported. In June, 4682 people asked to port their mobile number from one carrier to another, up 1400 on the average for the prior 12 months, according to the Telecommunications Carriers Forum. Telecom stock fell 10 cents to $2.70 yesterday.

Businesswire.co.nz

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