Stocks to watch: Cavalier, F&P Healthcare, PPP, Wrightson

Friday 20th November 2009

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

Themes of the day: PGG Wrightson announced plans to raised $180.1 million in a rights issue at a deep discount as it raises funds to pay debt and satisfy the terms of a new cornerstone shareholder. Shares sank on Wall Street after Bank of America cut its outlook for the semiconductor industry. The greenback gained as investors eschewed risk. Crude oil and metals fell.

Cavalier Corp. (NZX: CAV ): Demand for residential carpet is beginning to stabilise, particularly in Australia, though at volumes some 20% lower than normal, said Forsyth Barr analyst John Cairns, according to the ShareChat website. Commercial carpet demand is continuing to soften. Still, “Cavalier is well-managed with significant operating leverage to a recovery in expenditure on discretionary consumer durables," Cairns said. The carpet maker rose 2.5% to $2.51 yesterday.

Fisher & Paykel Healthcare (NZX: FPH ): Chief executive Michael Daniell said the manufacturer achieved better-than-expected growth in the first half and expects “continuing growth in demand for its products” through the rest of 2010. The company yesterday posted a record first-half profit of $37 million. The shares climbed 4.6% to $3.19.

Pan Pacific Petroleum (NZX: PPP ): The oil company climbed 5.5% to 58 cents yesterday after saying PetroVietnam would use its pre-emptive right to acquire a 10% interest out of 15% in an exploration block that would otherwise been available to Pan Pacific, which today said it may secure the other 5%. Chief executive Tom Prudence said the company plans to participate in five attractive exploration wells over the next six months “with the potential to have a significant impact.”

PGG Wrightson (NZX: PGW ): New Zealand’s largest agricultural services company plans to raise $180 million in a rights offer of nine new shares for every eight held at 45 cents apiece. The shares were halted for the offer. Wrightson needs to repay $200 million of debt coming due in March as a condition of China’s Agria investing $36 million in the company for a cornerstone stake. The shares dropped 7% to 65 cents yesterday. Pyne Gould Corp. (NZX: PGC ) was also placed in trading halt pending the Wrightson statement.

Businesswire.co.nz

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