Stocks to watch: AMP Office, Contact, Cynotech

Tuesday 9th 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: The US dollar rose to the highest in a week against the euro amid speculation the world’s biggest economy will revive enough by the end of the year to warrant the Federal Reserve raising its interest rate target from near zero. The euro also weakened against the yen after Standard & Poor’s cut Ireland’s credit rating to AA, the second downgrade this year.

Abano Healthcare Group (ABA): The specialist medical centre chain said it is continuing to generate strong revenue and operating cash flows since the end of the 2009 financial year, with all its businesses meeting or exceeding forecasts Net profit is expected to rise to $9.1 million to $9.7 million this year, the company reiterated in its newsletter to shareholders. The shares rose 5 cents to $5.25 yesterday and has gained 21% in the past three months.

AMP NZ Office Trust (APT): The shares fell 2.6% to 74 cents yesterday after the property investor said it received subscriptions for about $192 million of $201.3 million raised via its rights issue, leaving underwriters led by First NZ Capital to pick up about $9.5 million. ANZO chairman Craig Stobo said the response showed a strong take up.

Contact Energy (CEN): The biggest utility on the NZX 50 fell 2.2% to $5.67 yesterday, bringing its slide this year to 19%. The utility cut its earnings forecast for a second time, as surplus capacity in South Island hydro lakes and reduced demand from Tiwai Point weigh on wholesale prices. Underlying earnings after tax will fall 30% to 33%, it said. “By taking a big user out you’ve got surplus generating capacity, not helped by higher-than-normal rainfalls,” said Stephen Walker, head of asset management at Goldman Sachs JBWere. “The market is going to have inefficiencies which can cost the generators.”

Sealegs Corp. (SLG): The maker of amphibious boats is rated a “speculative buy” by McDouall Stuart, according to the ShareChat website. The company has long-term growth prospects, particularly in the US once that market recovers, and is lifting revenue. The shares were last quoted at 13 cents.

Businesswire.co.nz

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