Stocks to watch: NZ Refining, Steel & Tube, Auckland Airport, TEL, DGL, POT

Thursday 18th March 2010

New Zealand Refining keeps climbing after announcing its refinery margins have shown further improvement, Steel & Tube says that there are early signs that conditions may be slowly improving and Telecom shares sink to a new low.

New Zealand Refining (NZX: NZR ): The nation's only oil refinery has climbed 7% in the past two days after announcing that its refining margin recovered to US$6.85 per barrel in the first two months of the year, from as little as US$1 in December. The stock edged up 0.8% to $3.64 yesterday.

Steel & Tube Holdings (NZX: STU ): The steel building products company said in its interim report that there are "early signs that conditions may be slowly improving but the key issue is the uncertainty around the extent and timing of the recovery." It expects minimal benefit from any pickup in the economy this year, while predicting its second half performance will exceed first-half results. Short-term market conditions "are expected to be difficult." The shares rose 0.8% to $2.62 yesterday.

Telecom (NZX: TEL ): The nation's biggest phone company sank 1.4% to a record low $2.14 yesterday, hurt by its projection that the government's rural broadband initiative will cut earnings by $168 million over the next three years. "They have got a lot of headwinds and not just in this area," said James Lindsay, who helps manage $450 million at Tyndall Investment Management.

Port of Tauranga (NZX: POT ): The nation's biggest export port today announced it has agreed to buy tapper Transport, a business adjacent to its MetroPort inland hub in south Auckland for $15 million. The shares fell 9 cents to $6.91 yesterday.

Auckland International Airport (NZX: AIA ): New Zealand’s busiest gateway’s first half earnings showed retail and property rental revenue was down, while passenger service charge and car-parking revenue was higher than expected said Florian Burch, an analyst at ASB Securities in ShareChat. He remains confident passenger number growth for the full year will be between 2.5 and 3% “unless Australian visitors cease gracing us with their presence in such vast numbers.” Visitor numbers from Australia in January were up 17.25 on January 2009. The shares dropped 0.5% yesterday to $1.95.

Delegat’s Group (NZX: DGL ): The maker of Oyster Bay brand wines has limited balance sheet flexibility, Adrian Allbon of Goldman Sachs JBWere said in ShareChat. Delegat’s expects its full-year profit to be down between 30-40% on last year’s record $30 million, and key catalysts on this number will be the N.Z. dollar versus the pound, currently at a post-float high, and the N.Z. harvest announcement in mid-June, Allbon said. “If the industry harvest is flat to modestly down year-on-year, as NZ Wine is currently predicting, then the industry bulk wine surplus should start to normalize in 2011 and improve future prospects,” he said. Its shares were unchanged yesterday at $1.90.

Diligent Board Member Services (NZX: DIL ): The online provider of services to boards of directors said it has secured a US$1 million line of credit from Spring Street Partners LP for the next 18 months. The shares have soared 370% in the past 12 months. They rose 2.1% to 49 cents yesterday.

Economic themes of the day: Global markets lifted on news that the US Federal Reserve expects to retain low interest rates for at least three months, along with confirmation that America's inflation still has a firm lid on it.

The Dow Jones rose 0.74%, NASDAQ was up 0.83%, while the Chicago Board Options Exchange Volatility Index, or VIX, known as Wall Street's ‘fear gauge', plunged 6.2% to 16.59, the lowest since May 2008.

Businesswire.co.nz

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