Stocks to watch: Orion awaits payment, Sky TV outlook

Friday 17th April 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 rose in the US after better-than-expected earnings from JPMorgan Chase, America's No. 2 bank. Google, the world's most-popular search engine, posted an 8.9% gain in first-quarter earnings to US$1.42 billion. In New Zealand, government figures today are expected to show the consumer price index eased back to 3%, the top of the central bank's target band, from 3.4%.

Australia & New Zealand Banking Group (ANZ): The Australian lender is on a shortlist of three to acquire Royal Bank of Scotland's Asia assets, which are expected to fetch US$1.8 billion. HSBC Holdings and Standard Chartered are also on the list. The shares rose 0.6% to $21.35 yesterday.

Contact Energy (CEN): The biggest utility on the NZX 50 yesterday said it was considering four options to develop hydroelectric dams on the Clutha River, plans originally considered by the Electricity Corp. The costs could range between $300 million to $1.5 billion. The shares jumped to NZ%5.70 from $5.47 yesterday.

Cooks Food Group (CFG): The NZAX-listed food company announced a binding agreement to sell its business assets to Hutchinsons, a unit of Food Holdings Pty. Hutchinsons will also gain the right to complete the purchase of the Diamond and DYC brands from Goodman Fielder. Cooks will receive about $4 million for the trading assets and intellectual property rights to its existing brands, it said. Cooks will maintain its NZAX listing as it seeks other opportunities. The shares last traded on January 26 at 25 cents.

Orion Minerals Group (OMG): Shareholder Fengli Group (Hong Kong) Co. failed to make a US$8 million payment as expected by the close of trading on April 15, Orion said in a statement. Orion owns Minera Varry, a company which owns an iron ore mining concession in Chile. The shares last traded on the NZAX market on March 24 at 24 cents.

Sky Network Television (SKT): The shares rose 2.5% to $4.05 yesterday and are up 6.8% this year. Graeme Thomas, who helps manage $250 million at Milford Asset Management, said the pay-TV company has "great cash flow" and faces less prospect of regulation versus free-to-air channels under the Key administration.

Warehouse Group (WHS): The biggest retailer on the NZX 50 yesterday named Mark Powell as chief of its Warehouse Stationery chain after Gary Rohloff resigned. Powell is currently Warehouse's supply chain and merchandise planning manager. The shares rose three cents to $3.45 yesterday.

By Jonathan Underhill

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