Stocks to watch: Mainfreight profit down 66%, S&P on power companies

Thursday 20th August 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 gained as the price of oil gained and the US earnings season continued to exceed analysts’ expectations. Asian equities declined on fears the Chinese economy may not recovery as quickly as expected, and the Shanghai Composite Index shrank 5.3% yesterday. The kiwi dollar held above 67 US cents as the gain in US stocks revived appetites for higher yields.

AFFCO Holdings (AFF): The North Island meat processor fell 7% to 39 cents. Today the company said processing margins have been squeezed by a strong kiwi dollar and dwindling supplies of livestock.

Contact Energy (CEN): Ratings agency Standard & Poor’s warned New Zealand’s energy companies face downgrades as proposed electricity reforms boost competition and create more risk in their operating environments. Greater penalties proposed for dry year risk would expose State-owned Meridian Energy and Contact to much higher costs if they were “caught out” in a period of low hydro inflows, the report said. The stock slipped 0.5% to $6.25 yesterday.

Mainfreight (MFT): The biggest trucking firm on the NZX 50 first quarter profit shrank two-thirds to $2.7 million as the company spent some $1.3 million in restructuring and introducing cost-cutting measures to lift its performance. Trading has improved in July and August, and the company expects this to continue into the coming quarters, it said in a statement. The shares sank 2.2% to $4.79 in trading yesterday.

Marlin Global (MLN): The investor in growth companies outside New Zealand yesterday posted a full-year profit of $6.2 million, a turnaround from the $5.2 million loss its first eight months of operations to June 30, 2008. The portfolio “maintained a significant exposure to Asia (specifically China), a region that has proven resilient in terms of economic, profit and share price performance,” chairman Rob Challinor said. The shares were unchanged at 82 cents yesterday.

SmartPay (SPY): The merchant services company soared 73% to 2 cents yesterday after agreeing with the receivers of ProvencoCadmus to purchase its payments division of the company.

Businesswire.co.nz

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