Stocks to watch: Burger Fuel, Contact Energy

Friday 3rd April 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 20 nations pledged US$1.1 trillion to boost funding for the International Monetary Fund and free up the availability of trade credit. The announcement spurred a rally in stocks in Europe and the US, and lifted the price of crude oil. New Zealand's dollar rose above 58 US cents for the first time in 11 weeks.

Burger Fuel International (BFW): The burger chain said it signed a second licensing agreement outside of Australasia in a deal with Saudi Arabia's Abdulla Fouad Group that also covers Bahrain. Burger Fuel earn up-front territory fees and on-going royalties based on store turnover, it said. The shares trade infrequently on the NZAX market and were last at 28 cents yesterday. The company went public in 2007, with the sale of 15 million shares at $1 apiece.

Contact Energy (CEN): First NZ Capital's Jason Lindsay said the largest listed power utility lost $610 million as it shed customers due to last year's price rise and the furore over directors' fees, the Independent reported. Chief executive David Baldwin told an investor briefing the company would struggle to any tariff rise for electricity this financial year. Its shares climbed 4.3% to $5.80 on the stock exchange yesterday.

Fisher & Paykel Appliances Holdings (FPA): The whiteware manufacturer laid off 340 staff in Queensland as it seeks to cut costs by cheap labour in Thailand, AAP reported. Shares in the company sank to a record low in February after Whirlpool Corp, its technology partner in the US, posted a fourth-quarter profit slump. The stock rose 4.3% to 49 N.Z. cents in trading yesterday.

Goodman Property Trust (GMT): The property investor said it has settled the $12 million sale of its property at 41 Nesdale Avenue in Wiri, Auckland. The shares were unchanged yesterday at 79 cents and are down 19% this year.

Telecom (TEL): The government's roll-out of ultra-fast broadband may give the largest listed company in New Zealand the opportunity to seek a review of its operational separation undertakings, the New Zealand Herald reported. The government's proposal document acknowledged the value of Telecom's investments could be eroded by the government-backed fibre network, and the telecommunications provider will take this into account as it prepares a submission. Its shares rose 3% to $2.37 in yesterday's trading.

Xero (XRO): The accounting software firm jumped 11% to $1.02 yesterday after the company said it is in talks with investors about a "significant capital raising" via a share placement to institutions and a share offer to retail investors. The shares may be sold at 90 cents apiece based on the talks, it said.

By Jonathan Underhill

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