Stocks to watch: FPA, Infratil, NZX, PGC, Telecom

Wednesday 7th 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: Shares rallied in Europe and the US overnight amid optimism third-quarter earnings will beat estimates and after Australia’s central bank became the first in the G-20 to raise interest rates again, signaling stronger economic growth. The kiwi dollar held at around 73:70 US cents.

Fisher & Paykel Appliances (FPA): The manufacturer was raised to ‘accumulate’ from ‘hold’ at Morningstar, reflecting the decline in the shares. Profit will weaken to $23 million in 2010 from $33.8 million last year. Earnings in 2011 will rise to $51 million, as the company benefits from cost reductions. The shares climbed 3% to 67 cents yesterday.

Hallenstein Glasson (HLG): The clothing retailer may lift profit this year, helped by a stronger New Zealand dollar, tight control of costs and store expansions, according to McDouall Stuart, the ShareChat website reported. Profit may rise to $13 million in 2010 from $12.8 million in the year just ended, according to the brokerage, which rates the company a ‘hold.’ The shares were unchanged at $2.80 yesterday.

Infratil (IFT): The investment group’s Snapper travel card unit has made a final offer to the Auckland Regional Transport Authority to use its system at no cost in Auckland rather than fund the $50 million development of French rival Thales’ proposal. Snapper is seeking early talks with ARTA and the NZTA, according to a Computerworld report.

NZX (NZX): The stocks exchange operator will use the technology and platform it gains via the acquisition of Australia’s Clear Grain Exchange to expand into other farm commodities, says chief executive Mark Weldon. "This is a greenfields opportunity," he said. "You can't just buy these spot trading platforms off the shelf, this stuff just doesn't exist.” The shares were unchanged at $8 yesterday.

Pyne Gould Corp. (PGC): The shares were raised to ‘buy’ from ‘hold’ by Forsyth Barr analyst John Cairns, who has added $40million to his estimate of the residual value of Marac’s impaired loans. The loans are being transferred to Real Estate Credit, a unit of Pyne Gould’s asset management arm, with the value reduced to $90 million from their original face value of $175 million. The shares fell 1 cent to 42 cents yesterday.

Telecom Corp. (TEL): The Commerce Commission released its telecommunication service obligations (TSO) determination for the 2008 year, putting the cost at $72.1 million. That’s up $10.7 million from the previous year and a touch higher than its original estimate of $70.7 million. The shares fell 3 cents to $2.58 yesterday.

Businesswire.co.nz

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