Stocks to watch: Pike River, Allied Farmers, Telecom, Abano, Contact

Friday 9th April 2010

Pike Coal River jumps 10% on market support of continued upgrades to coal prices. Telecom has another outage on its XT network and faces a High Court judgment that it may have to pay back millions of dollars to rival Vodafone NZ.

Pike River Coal (NZX: PRC ): The West Coast-based hard coal miner and exporter has had strong market support amidst continued upgrades to coking coal price expectations, and that the company is potentially going through its own rights issue said Tyndall Investment Management equities manager James Lindsay. Yesterday its shares were the NZX 50 index’s top performer, jumping 10% to $1.09.

Allied Farmers (NZX: ALF ): The latest revision of Treasury’s estimate as to how much the government will have to pay out under its retail deposit guarantee comes out today in the Crown’s financial statements for the eight months ended February. The Taranaki-based finance company that bought the Hanover loan book in a debt-for-equity swap last year recently became aware of a $20 million guarantee waived by the Hanover board before the deal. The shares were unchanged at 6 cents in trading yesterday.

Contact Energy (NZX: CEN ): Hydro levels were at expected levels for March according to NZX’s monthly operational report, though inflows were low, meaning more expensive plant was used for electricity generation. Its shares fell back seven cents from a seven month high to $6.43.

Telecom (NZX: TEL ): The national communications carrier’s XT network north of the Bombay Hills went down for two and a half hours on the same day it learned of a High Court judgment that it may have to pay back millions of dollars to rival Vodafone NZ. Craigs Investment Partners analyst Geoff Zame said Vodafone had paid Telecom about $100 million under the TSO and would be hoping to claw some of that back. Telecom shares dropped two cents yesterday to $2.22.

Abano Healthcare Group (NZX: ABA ): The dental, radiology and audiology business has an upside potential from expansion into Asia and the group’s increasing focus on growing audiology and dental businesses in Australia said Michelle Perkins of Craigs Investment Partners on the ShareChat website. “We maintain our view that the sale of the New Zealand audiology business and the increasing move into the offshore market raises the overall risk profile of Abano, making it more suitable for investors with a longer-term investment horizon,” she said. Its shares rose 18 cents yesterday to $5.50.

Economic themes of the day: Greece's ongoing economic woes continue to buffet the euro, though it edged up 0.1% against the greenback to US$1.3356.

However the kiwi strengthened against the euro by 0.25% to close at 52.86 euro cents. The kiwi also edged up against the greenback to close at 70.61 US cents.

Data from American retailers was stronger than the market expected, bolstering hopes for the US economic recovery.

In late trading, the Dow Jones Industrial Average was up 0.33%, the Standard & Poor's 500 Index was up 0.38% and the Nasdaq Composite edged 0.26% higher.

Businesswire.co.nz

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