Stocks to watch: Telecom's rivals, Pike River outlook

Tuesday 12th 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: Shares on Wall Street and in Europe fell, led by financials and resource companies, as some investors deemed banks expensive after the recent surge and price of crude oil and metals eased. Australia is set to release its budget at 9:30 p.m. NZ time, expected to show a growing deficit, ballooning debt and spending cuts. Prices of crude oil and metals declined.

Burger Fuel Worldwide (BFW): Directors Carl Howard-Smith and Emmet Hobbs retired after helping take the burger chain public in 2007. Their departure follows the appointment of independent director Al Dunn last October, which has left the board “rather large” for an NZAX-listed company, chairman Peter Brook said. Howard-Smith and Hobbs are both directors of Mainfreight. Shares of Burger Fuel last traded at 28 cents on May 6 and have dropped about 38% in the past year. The company yesterday announced the opening of its 27th New Zealand store.

Fisher & Paykel Appliances (FPA): The manufacturer would only raise more equity capital as a last resort, given the dilutive impact on existing shareholders, according to Morningstar Research, the ShareChat website reported. The company will raise as much as NZ$230 million selling land and shuttering plants. F&P Appliances gained an extension on its short term debt facility until the end of this month. The shares gained 3 cents to 67 cents yesterday and has soared 49% in the past month.

Lion Nathan (LNN): The second-largest beer brewer in Australia has signed an implementation agreement with Kirin Holdings over the Japanese beverage giant’s takeover bid. Kirin hopes to acquire the 53.9% of the company it doesn’t own for A$12.22, which A$11.50 to be paid by Kirin, and a further 72 Australian cents paid by Lion Nathan as a fully-franked cash component. The deal requires at least 75% of non-Kirin shareholders to agree to the deal. The shares resumed trading yesterday after being halted on May 7, and fell 1.7% to $14.65.

Pacific Brands (PBG): The Australian maker of bonds and holeproof underwear plans to raise A$256 million selling new shares as it seeks to divest assets. The company will sell A$154 million of stock to institutions at 60 Australian cents apiece, a 22% discount to its last trading price. The balance will be made up via the sale of stock to retail investors. The stock last traded on Friday at 77 Australian cents. It trades infrequently on the NZX, where it was last at 40 cents on April 6.

Pan Pacific Petroleum (PPP): The oil exploration company’s stock was halted from trading on the NZAX market yesterday pending an announcement. Pan Pacific told the ASX it plans to announce its entry into a new exploration venture. The shares rose 2.5% to 41 cents before being halted.

Pike River Coal (PRC): The coal miner yesterday responded to an ASX query on the recent surge in its stock price by pointing to two recent broker analyst reports which have” re-rated the company’s share price outlook, and positive news reports relating to the steel industries in China and India.” Pike’s stock has performed in line with gains in the ASX Metals & Mining index, it said. The stock rose 3.9% to $1.06 and has soared 35% in the past month.

Telecom Corp. (TEL): New Zealand Communications, the company set to provide the country with its third mobile phone operator, has rebranded itself to 2degrees as it prepares to enter the market in August. It’s coy on releasing any details about its brand or how it will compete with its larger rivals, but did confirm it is still building its network. Shares in the country’s largest telecommunications company sank 4% to $2.61 on the NZX 50 Index yesterday.

Businesswire.co.nz

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