Stocks to watch: Infratil, Telecom, Wakefield Health

Friday 26th June 2009

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

Themes of the day: Stocks on Wall Street rebounded, with the Standard & Poor’s 500 climbing 2%. US Treasuries rallied after better-than-expected demand in an auction of seven-year notes. In New Zealand, figures today are expected to show the economy contacted 0.7% in the first quarter, after shrinking 0.9% in the fourth quarter of 2008. The annual contraction was probably 2.3%. The OECD expects economic growth to resume in New Zealand before the end of the year.

Infratil (IFT): The investment group said its businesses are performing well and total operating income is expected to increase this year, according to its annual report. Medium term, there are excellent prospects for new investment opportunities, with governments in Australia and New Zealand committed to expanding infrastructure via increased private sector involvement. Infratil fell 0.6% to $1.75 yesterday and has gained 8% this year.

ING Property Trust (ING): The property market will continue to be challenging over the year ahead, the trust’s manager said in the annual report. A “degree of negative rental growth” is expected, it said. Still, the trust’s portfolio is well diversified and its income stream provides a base for positive returns in the year ahead, it said. The trust’s units were unchanged yesterday at 59 cents and have fallen 11% this year.

Pan Pacific Petroleum (PPP): McDouall Stuart analyst John Kidd said the discovery of oil off the coast of Vietnam was adding to the prospects for the oil explorer and producer, the NZ Herald said. PPP has 15% of the Red Emperor well where testing showed flows of 3265 barrels of oil and 8.1 million cubic feet of gas a day. The shares fell 1 cent to 55 cents yesterday and have soared 56% this year.

Telecom (TEL): The Commerce Commission's final determination on the pricing of sub-loop unbundling means companies compete with Telecom will probably find it uneconomic, Forsyth Barr analyst Guy Hallwright said, according to the ShareChat website. Hallwright said in the UK, where there is similar sub-loop pricing, there has been very little take-up by competitors. He rates Telecom a ‘hold,’ which is also the consensus of 14 ratings compiled by Reuters. The shares rose 3.5% to $2.67 yesterday.

Wakefield Health (WFD): The private hospital operator said the number of New Zealanders with private medical insurance has held at about 1.4 million over the past 12 months even as the economy sank into recession. There is potential for a slowing in the rate of near term future revenue and earnings growth, the company said in its annual report. The shares rose 1.1% to $9.10 yesterday.

Warehouse Group (WHS): Woolworths may resume its interest in acquiring Warehouse, the NBR reported, citing analysts at Morgan Stanley. The stock rose 5 cents to $3.70 yesterday.

Businesswire.co.nz

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