Stocks to watch: Pike River, Michael Hill, Taylors

Tuesday 25th August 2009

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

Themes of the day: Stocks on Wall Street pared their gains, with financials falling after SunTrust Banks Inc. said lenders face more credit losses in 2010 while commercial real estate demand may remain weak. Crude oil touched a 10-month high of US$74.81. Nouriel Roubini, the economics professor at New York University, said there is an increased risk of a double-dip recession as governments and central banks end their stimulus efforts. In New Zealand, coal miner Pike River Coal announced further delays to its first coal shipments.

ING Property Trust (ING): The trust told shareholders at their annual meeting in Tauranga yesterday that even after the reduction in the value of its property portfolio, its unit price still represents “a heavy discount to the asset backing.” The value of the portfolio fell 8.3% in the year to March 31. The shares rose 1.4% to 73 cents yesterday.

Michael Hill International (MHI): New Zealand’s largest jewellery chain reported a 176% surge in full-year earnings as its shift to Sydney resulted in a $53 million tax credit. Earnings before interest and taxation fell 46% to $20.1 million as the global downturn sapped demand for luxury items. The shares gained 7.5% to 69 cents yesterday and have surged some 31% so far this year.

Pike River Coal (PRC): The South Island coal mine developer posted a full-year loss as expected and said first shipments would be delayed until the first quarter of calendar 2010 because of slower-than-anticipated progress at the site. The delay requires an extension of the terms of its convertible bond. The shares fell 1 cent to $1.14 yesterday and have gained about 20% this year.

Taylors Group (TAY): Spotless Group of Australia, which owns 66% of Taylors, today said it has offered to buy the remaining shares for $2.08 per share cash and the final dividend of seven cents a share, implying a total price of $2.15 per share. Taylors jumped 12 cents to $2 yesterday, the highest in more than two years.

Vector (VCT): The gas and electricity lines company is due to post earnings today and may unveil a 123% surge in full-year profit to $366.6 million. The utility may show the benefit of high LPG margins and gains in power prices, according to Forsyth Barr analyst Andrew Harvey-Green. The shares are rated ‘hold,’ based on the average of seven analyst recommendations compiled by Reuters.

Businesswire.co.nz

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