Stocks to watch: F&P Healthcare, Telecom, Vector, Wellington Drive

Wednesday 9th September 2009

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

Themes of the day: Gold topped US$1,000 an ounce, crude oil and metals rose on optimism the global economy is moving closer to recovery. Stocks rose in the US and Europe. International Monetary Fund managing director Dominique Strauss-Kahn said global recovery may come sooner than expected. The New Zealand dollar rose to as high as 69.83 US cents, a new 12-month high. Investors are awaiting the Reserve Bank of New Zealand’s review of monetary policy tomorrow, which is expected to hold the official cash rate at 2.5% and may drop its easing bias.

Fisher & Paykel Healthcare (FPH): The shares declined 2.6% to $3.38 yesterday, leading the NZX 50 lower, as the kiwi dollar traded above 69.5 US cents. A high currency erodes the value of its US sales.

Goodman Fielder (GFF): The shares jumped 7% to $2 yesterday after Kraft Foods 10.2 billion pound offer for Cadbury lifted optimism about valuations of food makers. Cadbury spurned Kraft’s initial offer and the maker of Oreo cookies is expected to sweeten its proposal.

Life Pharmacy (LPL): The nation's only listed pharmacy group said its offer for rival Pharmacybrands went unconditional, putting it a step closer to creating a pharmacy group with up to 35% of the market. The shares rose 1.9% to 53 cents yesterday.

OceanaGold Corp. (OGC): The price of gold reached US$1,009.70 an ounce on the New York Mercantile Exchange, edging toward the record US$1,033.90 reached in March last year. The operator of the Macraes gold mine rose 4 cents to $1.34 yesterday.

Southern Travel Holdings (STH): The travel company reported a net loss of $48,000 last year and said that like others in the tourism industry it “has experienced an extremely difficult and challenging financial year.” The directors are considering various avenues to increase the capital of the company to strengthen the finances of the Group and to be available for acquisitions, it said. The shares last traded at 20 cents on September 1.

Telecom Corp. (TEL): At least 10,000 mobile phone users may have quit Telecom and Vodafone to join new arrival 2degrees, according to figures from the Telecommunications Carriers' Forum, the Dominion Post reported. The industry body reported a spike in the number of customers wanting to transfer their mobile phone number to a different carrier in August, according to the report. The shares fell 7 cents to $2.71 yesterday.

Vector (VCT): The electricity and gas lines company welcomed a Commerce Commission proposal released yesterday that would allow distributors to increase prices at the rate of inflation. The shares were unchanged at $2.05 yesterday.

Wellington Drive Technologies (WDT): The maker of energy efficient motors was cut to ‘reduce’ from ‘hold’ by Forsyth Barr analyst Andrew Harvey-Green, according to the ShareChat website. The company is likely to seek to raise equity in the next two months to avoid running out of cash by year-end, he said. It burned through $11.6 million of cash in the first half, more than the $7.6 million forecast in its January prospectus. The shares fell to 8.5 cents from 9 cents yesterday.

Businesswire.co.nz

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