Stocks to watch: Wrightson, F&P Appliances, Rakon, Turners & Growers

Monday 29th June 2009

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

Themes of the day: The kiwi dollar held above 64 US cents after China reiterated its call for a new global reserve currency to supplant the greenback. The US dollar dropped after the comments. Figures today may show the merchandise trade surplus widened to $350 million last month, narrowing the annual deficit to $3.59 billion from $4.11 billion. Building consents for May are also due out, and are expected to show a continued improvement in the number of residential permits issued.

Air New Zealand (AIR): The national carrier is threatening to sue Qantas Airways to recover costs incurred when engineers of Qantas went on strike last year, disrupting maintenance for the New Zealand company’s planes, the Sydney Morning Herald reported. Air NZ’s Australian manager, John Harrison, said a final decision on legal action will be made next week. The shares rose 1 cent to 92 cents on Friday.

Fisher & Paykel Appliances (FPA): The appliance manufacturer got a take-up of 95.1% of its renounceable rights issue that closed last Thursday and the remaining 4.9% will be taken up by the underwriters. Haier took up its entitlement to 20% and including its top-up, F&P Appliances raised gross proceeds of $200.5 million. The shares fell 2.9% to 66 on Friday.

PGG Wrightson (PGW): The company was upgraded to ‘buy’ by Morningstar’s AspectHuntley research unit, which said the company is confident of reaching its goal of repaying $125 million of amortised debt by December 2010 through improvements in cash flow. Wrightson’s foray into the seeds business in Australia and South America should “yield good returns in the long run” while finance and insurance provides “good long-term growth opportunity.” The shares rose 4.4% to $1.18 on Friday.

Rakon (RAK): Market conditions may be starting to stabilize for the maker of navigation system components, said Dennis Lee, analyst at ABN Amro Craigs, according to the ShareChat website. Lee cited improved earnings guidance for tech companies including Texas Instruments and QualComm. He said Rakon may win a major contract in the second half of 2010. A supply contract for 10 million units of the company's TXCO product could add about NZ $3 million to operating earnings, according to the report. Lee rates Rakon a ‘hold.’ The shares rose 4.9% to $1.50 on Friday.

Turners & Growers (TUR): The fruit and vegetable marketing and distribution company has urged the government to remove the kiwifruit export monopoly of Zespri, claiming the organisation has “abused its privileged position at the expense of New Zealand Inc. “ The shares were at $1.60 on Friday and have climbed 16% in the past month.

Warehouse Group (WHS): The retailer launched its online store last week, Fairfax Media reported. The website cost almost $1 million to develop, according to the report, which cited chief executive Ian Morrice. Online sales are expected to be $35 million to $50 million a year within five years, about the same as a large Warehouse Red Shed, he said. The shares rose 1.1% to $3.74 on Friday.

Businesswire.co.nz

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