Stocks to watch: Tower, FPA, dairy sector

Wednesday 3rd June 2009

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

Themes of the day: The New Zealand dollar climbed as high as 65.89 US cents as talk of moves to find a new global reserve currency weighed on the US dollar. The price of milk powder slumped 12% in Fonterra Cooperative Group’s latest online auction, stoking concern protectionist moves by Europe and the U.S. will undermine any recovery in dairy prices Stocks edged higher on Wall Street after better-than-expected home resales. The Reserve Bank of Australia kept its benchmark interest rate unchanged at 3% yesterday, as expected.

Air New Zealand (AIR): Pacific Blue plans to start daily trans-Tasman services out of Hamilton, resuming international flights to the North Island city after Air New Zealand withdrew from such services. The airline, a unit of Virgin Blue, plans seven flights a week to Sydney and Brisbane, the NZ Herald reported. Air New Zealand shares fell 1 cent to $1.05 yesterday.

Fisher & Paykel Appliances (FPA): The company continued its post-refinancing rally, gaining 4.6% to $1.15 yesterday after announcing it has issued about 58 million new ordinary shares to China’s Haier. The New Zealand appliance company gained distribution into China and the endorsement of a major manufacturer by attracting Haier to its refinancing plan, while repaying debt and strengthening its balance sheet.

Nuplex Industries (NPX): The specialty chemicals maker fell 6.5% to 43 cents yesterday after announcing plans for a one-for-four share consolidation. The proposal, which will trim the company’s bloated share register post it capital raising, doesn’t affect the valuation of investors’ holdings.

Opus International Consultants (OIC): The engineering consultancy said full-year earnings should be in line with analysts’ expectations. Trading in New Zealand and Canada is ahead of last year, and Australia is only moderately weaker, though a sharp contraction in the U.K. economy means that Opus will have a softer-than-expected first half, it said today. The shares fell 3 cents to $1.37 yesterday.

PGG Wrightson (PGW): The average price of milk powder sank to US$1,886 per metric ton, according to results posted on the GlobalDairyTrade website, down from US$2,144 last month. The drop comes after Fonterra Cooperatyive Group announced an opening forecast payment for the 2010 season of $4.55 per kilogram of milk solids, a 13% decline from this season’s $5.20 per kilogram. Shares of New Zealand’s biggest rural services company fell 5 cents to $1.30 yesterday. NZ Farming Systems Uruguay (NZS), which developers dairy farms in South America using intensive New Zealand farming techniques, fell 2 cents to 53 cents yesterday.

Pike River Coal (PRC): The coal miner fell 3.3% to $1.19 after answering its second share price inquiry in as many months yesterday. The coal miner said it knew of no reasons why its stock should have climbed, other than factors already known to the market.

ProvencoCadmus (PVO): The eftpos terminal company yesterday said the sale of Vantex division to subsidiaries of US-based Ingram Micro was completed on Friday. The stock surged 39% to 8.5 cents yesterday, having tumbled 80% in the past 12 months.

Tower (TWR): The insurer climbed 9.5% to an eight-month high of $1.84 yesterday. On Friday, the insurer and investment manager part-owned by Guinness Peat Group posted a 32% gain in first-half profit on stronger earnings from general insurance. With Tower “there was a pretty good performance across all divisions of the business,” said Craig Brown, who helps manage about $2 billion at ING New Zealand. “In a pretty difficult market it was a good result.”

Businesswire.co.nz

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