Stocks to watch: Telecom guidance, AMP Office Capital

Friday 8th May 2009

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

Themes of the day: The 19 largest US banks need a combined US$74.6 billion to provide enough of a cushion, according to the results of the so-called stress tests. Bank of America needs US$33.9 billion, Wells Fargo needs US$13.7 billion, GMAC requires US$11.5 billion and Citigroup US$5.5 billion. Shares fell on Wall Street, snapping a five-day rally. In New Zealand, Telecom reiterated its forecast for a 5% to 8% decline in full-year EBITDA.

AMP NZ Office Trust (APT): The trust was the biggest decliner on the index yesterday, sliding 8.4% to 76 cents after announcing plans to raise $201 million, while reducing dividend payments, to strengthen its balance sheet. The property investor is negotiating with its banks to repay a $242.5 million debt facility due to expire in October 2009, entering into a new $100 million facility for three years. The renounceable rights issue is for nine new units for every 20 held at 65 cents apiece, a 21% discount, to repay debt and reduce gearing to around 19.3%.

Fisher & Paykel Appliances (FPA): New Zealand’s largest whiteware manufacturer rose 4.9% to 64 cents yesterday as it answered a stock exchange query on its recent surge in price. It pointed to a pick-up in sentiment and gains in the shares of Whirlpool Corp. The shares have climbed from 46 cents at the start of the month. “Things are getting less worse in the US, and that’s a big part of their market,” said Craig Brown, who helps manage about $1 billion of assets for ING New Zealand.

Lion Nathan (LNN): Australian second-largest beer maker had its stock halted from trading yesterday on concerns that confidentiality around takeover talks with Japan’s Kirin Holdings Co. had been breached. Lion’s independent directors agreed to recommend Kirin’s bid of A$12.22 a share to shareholders last month. The shares rose 0.7% to $14.90 before being halted.

Telecom (TEL): The largest company on the NZX 50 said adjusted EBITDA fell 3% to $1.36 billion in the nine months ended March 31, while reiterating its forecast for a full-year EBITDA decline of as much as 8%. The shares fell 1 cents to $2.82 yesterday.

Warehouse Group (WHS): The biggest retailer on the NZX 50 posted a 2.8% decline in sales for the third quarter ended April 26 at $383.5 million. Sales at the Red Shed outlets fell 1.5% to $332 million, or gained 1% on a same-store basis. The company forecast full-year adjusted net profit will be similar to last year’s. The stock fell 3 cents to $3.75 yesterday.

Businesswire.co.nz

Comments from our readers

No comments yet