Stocks to watch: Fletcher Building to benefit from insulation, sub-loop stoush

Friday 19th 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: US economic activity declines less-than-expected in Federal Reserve of Philadelphia survey while fewer Americans take out unemployment insurance, stoking optimism the worst of the global recession may be over, and boosting appetite for higher yields. Stocks on Wall Street edged higher and Treasuries declined on the boost in investor sentiment.

Fletcher Building (FBU): Prime Minister John Key yesterday said all the nation’s major banks have agreed to participate in the government’s home insulation programme, the Warm Up New Zealand scheme. The banks will waive fees on top-up loans homeowners will use to insulate their properties. The government is putting up $323 million over four years to insulate homes and subsidise heating devices. The shares rose 1.4% to $6.45 yesterday.

ING Property Trust (ING): The property group yesterday said it sold Regency House in Hamilton at the current book value of $7.6 million. The sale settles in August. The trust is selling non-core properties to repay debt. The trust’s units rose 1.7% to 59 cents yesterday, having declined 12% this year.

New Zealand Oil & Gas (NZO): The company was cut to “hold” at Morningstar’s Aspect Huntley research unit, which said it has limited scope to extend its stock gains from current levels after surging 28% this year as crude oil rallied. The shares fell 1.2% to $1.60 yesterday.

Oyster Bay Marlborough Vineyards (OBV): The grape grower yesterday said it had completed negotiations with Delegat’s Wine Estate on the price of grapes from the 2009 harvest. Total production fell 13% to 6,236 tonnes; in line with targets. While the growing season had been favourable, the market value of Marlborough grapes has declined, it said. Revenue fell 27% to $11.5 million and the grower got an average $1,843 per tonne of grapes. The shares fell 2% to $2.45 yesterday.

Telecom (TEL): The Commerce Commission was condemned by internet service provider Orcon Internet and mobile phone operator Vodafone New Zealand over its final price determination on the unbundling of Telecom’s sub-loop services. The regulator decided the largest-listed phone company could charge 26% more for access to its roadside cabinets than it could for entry to the local loop, so as not to hinder further investment. The shares gained 3.9% to $2.69 in trading yesterday.

Businesswire.co.nz

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