Stocks to watch: Abano, ANZ Bank, FPH, PPL, Westpac

Friday 9th October 2009

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

Themes of the day: Reserve Bank Governor Alan Bollard said the high kiwi is curbing any rebalancing in the economy toward exports and investment and away from consumer spending. The New Zealand dollar reached a new 14-month high above 74 US cents. Stocks climbed on Wall Street and in Europe as profit from Alcoa Inc. stoked optimism about third-quarter earnings and data showed rising retail sales and fewer jobless claims.

Abano Healthcare Group (ABA): Shareholders in the diversified medical services franchise investor yesterday supported the $157.8 million sale of Bay Audiology to National Hearing Care, freeing up the company to expand its operations into Australia and Asia. The shares were unchanged at $6.45 in trading yesterday and have surged 47% in the past six months.

Australia & New Zealand Banking Group (ANZ): The lender is reviewing its legal strategy in light of today's High Court decision against Westpac Banking Corp. in a case involving tax and interest owing of $961 million, the bank has told BusinessWire yesterday. Its shares rose 5.3% to $30 on the NZX.

Fisher & Paykel Healthcare (FPH): The shares dropped 3.2% to $3.06 yesterday as the kiwi dollar climbed above 74 US cents to a 14-month high, following the Australian dollar higher after the jobless data. F&P Healthcare gets almost 80% of its revenue in US dollars. The stock has also weakened recently on concern US health-care reforms will impose an excise tax on medical devices.

Pumpkin Patch (PPL): The children’s clothing chain is rated ‘underperform’ by First NZ Capital analyst Sarndra Urlich, according to the ShareChat website. She forecasts normalised net profit will rose to $23.9 million in 2010 from $14.7 in 2009. Urlich raised her valuation to between $1.74 and $2.20 a share, based on “a slightly less bearish view on the earnings outlook for Australia and wholesale." The shares fell 2 cents to $1.97 yesterday.

Westpac Banking Corp. (WBC): The Australian-owned bank became the second of the big four to lose its tax avoidance case against Inland Revenue, and faces a bill of close to $1 billion. The High Court in Wellington found against Westpac on all counts and Judge Rhys Harrison said it was fortunate for the bank that IRD didn’t pursue other parts of the transactions in dispute. The shares climbed 3.6% to $31.80 and have surged about 52% this year.

Businesswire.co.nz

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