Stocks to watch: AFI, FPA, NZ Refining, Sky City

Tuesday 28th July 2009

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

Themes of the day: Government figures today may show the annual merchandise traded deficit narrowed to $2.56 billion last month, from $3.04 billion as the weak domestic economy caused imports to fall more than exports. The kiwi dollar held at about 65.60 US cents. The benchmark NZX 50 Index almost reached 3,000 points yesterday, the highest since early October, as better-than-expected earnings in the US stoked investors’ risk appetite.

Australian Foundation Investment Co. (AFI): The investment group that targets companies on the ASX yesterday posted a 75% in full year profit and said economic conditions in Australia and worldwide will probably remain subdued in the medium term. The shares rose 1.4% to $5.80 on the NZX yesterday.

Botry-Zen (BOZ): Shareholders approved the issue of 45.5 million ordinary shares to Melic Innovators at 2.2 cents apiece, raising $1 million, at their July 24 meeting. The funds raised will be used to help the company realize the commercial potential of its BOTRY-Zen and ARMOUR-Zen biological control agents for controlling grape rot in vines, it said. The shares trade infrequently and were last at 2.4 cents on July 15 on the NZAX market.

Fisher & Paykel Appliances (FPA): AMP Capital Investors disclosed yesterday it had become a substantial holder of the appliance maker’s shares, holding 39.3 million, or 5.4% of those on issue. The shares rose 3.6% to 86 cents yesterday and have declined 12% this year.

NZ Farming Systems Uruguay (NZS): Hunter Hall Investment Management, an Australian ethical investment manager, trimmed its holding of the dairy farm developer to 36.2 million shares, or 14.8% of those on issue, from about 38.7 million, according to a filing to the NZX yesterday. The shares dropped 4.2% to 46 cents yesterday, the biggest decline on the NZX 50. They have shed 20% this year as global dairy prices weakened and concerns rose about the company’s debt levels.

New Zealand Refining Co. (NZR): The nation’s only oil refinery operator yesterday said it was unaware of any interest from parties wanting to acquire a stake or the whole of the business. Bloomberg reported on Friday that Valero Energy Corp. was considering making a full or partial takeover. The shares jumped 15 cents to $7.65 yesterday.

Sky City Entertainment Group (SKC): The casino and hotel operator is rated a ‘buy’ by Goldman Sachs JB Were analyst Marcus Curley, according to the ShareChat website. Sky last week said profit in the year ended June 30 was $113 million to $116 million, higher than its previous estimate. The upgrade suggests a substantial turn-around of the Adelaide casino and better returns from the Auckland and Darwin casinos. “On our estimates, Sky City remains the cheapest gaming stock in Australasia,” said Curley, who values the stock at $4.15. The shares rose 1% to $3.13 yesterday. The stock is rated ‘outperform’ based on nine recommendations compiled by Reuters.

Businesswire.co.nz

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