Stocks to watch: Air NZ, IRG, Tower, Life Pharmacy

Tuesday 4th 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: The Standard & Poor’s 500 topped 1,000 for the first time since November, commodities rallied and the US dollar dropped as better-than-expected data in the US and China stoked optimism the recession is abating. Stocks rallied in Europe after earnings from lenders HSBC Group and Barclays topped estimates. The New Zealand dollar climbed, reaching 66.88 US cents.

Air New Zealand (AIR): Earnings probably shrank to $65 million in the latest year from $218 million in 2008, and will probably rise to $80 million in 2010, research firm Morningstar said in a report last week. The national carrier’s fuel bill may fall by $560 million in 2010, based on the company's current hedging position and forecasts for the price of crude oil. Research firm Morningstar estimates West Texas intermediate oil will average US$72 a barrel next year. Still, lower fuel costs are unlikely to result in a dramatic improvement in profit because rivalry on key routes will probably result in further rounds of fare cuts, Morningstar says. The shares rose 0.9% to $1.10 yesterday.

Investment Research Group (IRG): The investment advisory firm said it is in talks with its auditors and bankers over some outstanding issues relating to its accounts. The company was due to file its accounts on July 31. It expects to make a further announcement in the near future, managing director Brent King said. The shares fell 3.5% to 2.8 cents yesterday.

Life Pharmacy (LPL): The chemist chain soared 67% to 60 cents yesterday after announcing an offer to acquire rival Pharmacybrands in an all-share proposal that values the target at about $20 million. The issue price will be 49.1 cents a share and Life Pharmacy will buy back partly paid shares and make a taxable bonus issue prior to the share swap.

Lyttelton Port Co. (LPC): The largest South Island port operator has lodged an application to expand its coal-yard at Te Awaparahi Bay in anticipation of growth in coal exports from state-owned Solid Energy and Pike River Coal. The shares last traded on July 30 at $2.40. Pike River slipped 0.9% to $1.14 yesterday.

New Zealand Oil & Gas (NZO): Crude oil rose above US$72 a barrel on optimism the end of recession will bring a revival in fuel demand. Crude for September delivery rose 3% to US$71.53 a barrel on the New York Mercantile Exchange and earlier climbed as high as US$72.20. The shares rose 2 cents to $1.64 yesterday.

Tower (TWR): The insurance group’s bbb- credit rating was affirmed by AM best, a New Jersey-based ratings company, reflecting Tower’s “continued operating profitability and stable, risk-adjusted capitalisation.” The shares rose 2 cents to $1.76 yesterday.

Wakefield Health (WFD): First-half profit will probably fall 30%-40% from the same period a year earlier, the hospital operator said today.

Businesswire.co.nz

Comments from our readers

No comments yet