Stocks to watch: Lion Nathan, NZ Refining, Pyne Gould rights, Telecom

Thursday 8th October 2009

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

Themes of the day: Alcoa Inc., the first company on the Standard & Poor’s 500 to post third-quarter results, surprised analysts by reporting a profit of US$77 million on costs cut and higher prices for aluminium. The results came after the close of trading on Wall Street, with the S&P 500 ending up 0.3%. The kiwi dollar held its gains above 73.50 US cents as the greenback strengthened. Data out of Australia today is expected to show the unemployment rate in New Zealand’s biggest export market rose to 6% from 5.8%.

Air New Zealand (AIR): The national carrier is seeking about $462,000 in unpaid invoices and costs from Papua’s New Guinea’s Air Niuguni. The Auckland High Court action is to recover engineering costs. The airline’s stock rose 2.4% to $1.29 yesterday.

Lion Nathan (LNN): Trading has been suspended in Australia’s second largest brewer of beer after Australia’s Federal Court approved the takeover by major shareholder Kirin Holdings. Shareholders will receive A$11.50 per share in cash with a special dividend of 50 Australian cents a share. The stock was unchanged at $13.69 has have surged 49% this year.

New Zealand Refining (NZR): The nation’s only oil refinery operated at full capacity in July and August, processing 6.8 million barrels. The average gross refining margin was US$2.99 per barrel, less than the expected range of US$3 to US$7. NZR said the smaller margin reflected a tough second half. The shares rose 0.8% to $4.90 yesterday.

NZ Farming Systems Uruguay (NZS): The developer of dairy farms in South America using intensive New Zealand farming techniques rose 2.2% to 46 cents yesterday, after the price of milk powder rose for a third straight month in Fonterra Cooperative Group’s online auction, adding to signs prices have revived from their lows this year. PGG Wrightson (PGW), New Zealand’s largest rural services company, gained 1.6% to 63 cents.

Pyne Gould Corp. (PGCRA): The company’s rights tumbled 25% to 0.009 cents, with 19.1 million changing hands yesterday. The headline shares (PGC) were unchanged at 42 cents. Some shareholders have sold the rights rather than participate in the investment group’s capital raising.

Telecom Corp. (TEL): The nation’s largest phone company says the government has underestimated the costs under the Telecommunications Service Obligation for uneconomic services, which may force it to cover the difference. Telecom is to stump up 70% of the $133.5 million. The Dominion Post reported spokesman Ian Bonnar saying Telecom has “serious concerns at the methodology used” which would result in the company getting “well below any reasonable commercial return." The shares fell 6 cents to $2.52 yesterday.

Businesswire.co.nz

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