Stocks to watch: Sky Network, ING, Mainfreight

Thursday 11th June 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 kept the official cash rate unchanged at 2.5%, saying there were signs of stabilization in the global economy and resilience in New Zealand. He reiterated his expectation that the OCR will stay low through until late 2010. The kiwi dollar climbed to more than 63 U.S. cents after the statement from 62.68 immediately before. Bollard is due to appear before the parliament’s finance committee later today. Stocks on Wall Street weakened as bond yields climbed. Crude oil rose to a seven-month high.

Glass Earth Gold (GEL): The NZAX-listed miner said it has entered into an option agreement to acquire 70% of Golden Fern Resources, which owns 70% of the Rise & Shine gold prospect in Otago. The option agreement is with Golden fern’s parent, CanAlaska Uranium, in a transaction that provides up to $900,000 of exploration spending by October 2011. Golden Fern has a concurrent JV with OceanaGold over the Rise & Shine prospect, Glass Earth said. The shares of Glass Earth last traded at 6 cents on June 5.

ING Property Trust (ING): The trust yesterday announced the unconditional sale of a Cavendish Drive, Manukau property at the current book value of $6 million to a private investor. The sale settles in December and continues ING’s strategy of selling non-core properties and to repay debt. The shares rose 1.8% to 57 cents yesterday.

Mainfreight (MFT): Goldman Sachs JBWere analyst Marcus Curley rates the transport company a “hold,” according to the ShareChat website. Curley cut his earnings forecast for 2010 by 20% and for 2011 by 15%, the report said. “We need to gain greater comfort over the pace of turnaround in global freight markets or material share price weakness" to turn positive on the company, he said. The shares fell 2% to $4.15 yesterday.

New Zealand Oil & Gas (NZO): Crude oil rose to a seven-month high after the American Petroleum Institute reported oil supplies fell 5.96 million barrels to 357.9 million last week. Crude oil for July delivery rose 1.7% to US$71.18 a barrel on the New York Mercantile Exchange. NZOG shares rose 2 cents to $1.61.

Pacific Brands (PBG): The Australian clothing manufacturer yesterday announced the completion of the retail component of its non-renounceable entitlement offer, raising about A$92 million. Combined with its institutional placement, the sale brings the total raised to A$256 million. The shares traded on the NZX yesterday at $1.09.

Restaurant Brands NZ (RBD): The fast-food franchise operator is to join the NZX 50 Index on July 1, replacing Tourism Holdings. Restaurant Brands this month reported a return to revenue growth at its Pizza Hut unit. Its shares surged 6.2% to $1.03 yesterday. Tourism Holdings (THL), which is to exit the index, was unchanged at 49 cents.

Sky Network Television (SKT): Goldman Sachs JBWere’s head of asset management Stephen Walker singled the company out for favour at a meeting of financial advisers in Wellington today. Sky has cemented its market position with the introduction of new products such as the PVR decoder and doesn’t have the dependence on advertising revenue that has pulled down rival media companies, Walker said. The stock climbed 0.7% to $4.38 yesterday and has climbed 19% this year.

Wellington Drive Technologies (WDT): The maker of energy-efficient motors for ventilators and refrigerators sank 9.1% to 15 cents yesterday after saying sales and profit will miss its prospectus forecasts this year, reflecting lower-than-expected demand for refrigeration motors in Asia and Europe.

Businesswire.co.nz

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