Stocks to watch: Auckland Airport, Delegat's, NZ Refining

Monday 27th July 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 Reserve Bank releases its latest review of monetary policy this Thursday, and is expected to keep the official cash rate unchanged at 2.5%, while Governor Alan Bollard may point to the high kiwi dollar as an impediment to an export-led economic recovery. The US dollar and the yen slipped against the euro on Friday in New York as investors took heart from better than expected corporate earnings and amid signs the economic slump in Europe may be abating. Consumer confidence rose to its highest level in 10 month, according to Roy Morgan. The polling company’s Consumer Confidence Rating rose 1.7 points to 107.8 in mid-July.

Auckland International Airport (AIA): Shares of the nation’s busiest gateway rose 4.9% to $1.72 on Friday after Finance Minister Bill English last week said foreign investors may face a lower hurdle under changes to the overseas investment regime. The Canada Pension Plan Investment Board was thwarted in its partial takeover attempt for the airport a year ago. “The Canadian got sent packing empty handed,” said Craig Brown, equities manager at ING New Zealand. “People are drawing the conclusion it would be a bit more takeover-friendly.”

Delegat's Group (DGL): The winemaker is rated ‘buy’ by ABN Amro Craigs analyst David Oxley, according to the ShareChat website after it raised its earnings guidance by about 20% to between $30 million and $31 million for the year ended June 30. Oxley sees opportunities for the company amid growth in demand for super-premium New Zealand wine in overseas markets. The shares were last at $2.17.

New Zealand Refining (NZR): Shares of the nation’s only oil refinery rose 4.9% to $7.50 on Friday after Bloomberg reported that Valero Energy Corp., a US refiner, is considering a bid for all or part of the refining company. As much as 36% of the refinery may be up for sale, as Shell NZ and Exxon Mobil consider selling their stakes.

Telecom Corp. (TEL): The company’s Independent Oversight Group determined that the carrier breached its operational separation undertakings by offering "loyalty discounts" to wholesale customers, the Dominion Post reported. A breach would be referred to the Commerce Commission, which could seek a penalty of up to $10 million. Telecom fell 1 cent to $2.80 on Friday.

Xero (XRO): The online accounting software company plans to buy back up to 500,000 shares over three months starting on July 30 to supply an employee share issue without diluting existing stock. The shares were unchanged at $1.43 on Friday and have gained almost 70% this year.

Businesswire.co.nz

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