Stocks to watch: Haier-FPA speculation, Contact outlook

Tuesday 26th May 2009

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

Themes of the day: Merchandise trade figures today may show trade deficit shrank to $4.12 billion in the 12 months ended April, according to a Reuters survey. The New Zealand dollar held above 62 U.S. cents. Chinese manufacturer Haier may take a stake in Fisher & Paykel Appliance as part of a $200 million capital raising, according to media reports.

Auckland International Airport (NZX: AIA ): The nation’s biggest gateway fell 1.2% to $1.60 yesterday. Overseas passenger numbers climbed last month, reflecting the positive impact of Easter, while domestic passengers fell on the impact on increased rivalry from Qantas Airways, the company said today.

Contact Energy (NZX: CEN ): The utility slipped 0.2% to $5.84 yesterday while TrustPower (NZX: TPW ) climbed 1.3% to $1.60. Goldman Sachs JBWere maintained a ‘neutral’ rating on the two utilities, saying earnings would be flat next year, on tariff constraints and weak wholesale prices.

Fisher & Paykel Appliances (NZX: FPA ): Chinese appliance manufacturer Haier may take a 20% stake in the Auckland-based company as part of its plan to strengthen its balance sheet and repay debt. The New Zealand Herald reported that First NZ Capital is helping to arrange underwriting for capital raising of up to $200 million. The shares were halted yesterday and the company is due to make its announcements tomorrow including its earnings report.

Fisher & Paykel Healthcare (NZX: FPH ): The manufacturer of breathing masks and respirators may post a 71% gain in full-year net profit to $60 million today, Forsyth Barr’s Hallwright said, according to the ShareChat website. Hallwright rates the stock a ‘buy.’ The shares fell 2.5% to $3.10 on Friday and are down 1.6% this year.

Sky City Entertainment (NZX: SKC ): The casino and hotel operator’s share purchase plan and top-up offer closed yesterday. The price was $2.61, the same as the institutional placement announced last month. The shares fell 1 cent to $2.87 yesterday.

Telecom (NZX: TEL ): The biggest company on the NZX 50 fell 5.4% to $2.46 yesterday. The phone company’s faster XT mobile network goes live on May 29 and chief executive Paul Reynolds wants to take mobile market share from Vodafone. The XT network “is a very good new starting point for them,” said Alan Moore, who helps manage about $250 million at Milford Asset Management. “But they have to get runs on the board and get that translated through to the bottom line.”

Vector (NZX: VCT ): The gas and electricity distributor faces very high regulatory risks as the government controls electricity and gas pricing, according to Morningstar Research, the ShareChat website reported. Growth in the Auckland region should bolster Vector’s revenue from electricity but that, in turn, will be restrained by the government’s price-reset programme, according to the report. The shares rose 2 cents to $2.17 yesterday. At that price, the stock is “fairly valued and adequately reflect the company's near to medium term fundamentals," Morningstar said.

Businesswire.co.nz

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