Stocks to watch: AMP NZ Office, Freightways, NZ Refining

Wednesday 19th 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: Shares rebounded worldwide after a pick-up in German investor confidence and better-than-expected earnings from US retailers Home Depot and Target. The Reserve Bank of Australia says there’s a danger of raising interest rates too soon as the economy of New Zealand’s biggest export market revives, according to minutes of its August 4 meeting. The kiwi dollar climbed back above 67 US cents. Statistics New Zealand releases the Producer Price Index for the second quarter today.

AFFCO Holdings (AFF): The North Island meat processor said the "cautious outlook for the second half” it gave at the first half has been justified as the fourth quater draws to a close. Reduced livestock numbers, the volatility and level of prevailing exchange rates and a tightening of market conditions offshore squeezed processing margins in the second half, it said in a statement today. The shares were unchanged at 42 cents yesterday.

AMP NZ Office Trust (APT): The property investor is rated ‘accumulate’ by Forsyth Barr analyst Jeremy Simpson, according to the ShareChat website. Risks include rising vacancies in the office market and the trust's empty 21 Queen St development, he said. "However, APT continues to deliver a solid result from its core portfolio," Simpson said. The trust’s units fell 1 cent to 79 cents yesterday.

Contact Energy (CEN): The biggest utility on the NZX 50 is preparing to import gas, if needed, because domestic gas for generation isn’t assured, managing director Tony Baldwin said, according to the NZ Herald. A shortage of cheap gas meant gas-fired stations had to be run at a loss last year, he said. The shares fell one cent to $6.28 yesterday.

Freightways (FRE): ING (NZ) reduced its holding in the courier company to 5.6% from 6.68% via the sale of 1.8 million shares, according to a substantial security holder notice yesterday. Freightways tumbled 8.8% on Monday after announcing a drop in its dividend payment and weaker trading. The stock was unchanged at $3.10 yesterday.

Glass Earth Gold (GEL): The NZAX listed minerals explorer has an option to acquire a 50% equity interest in the Ophir gold prospect in Otago with closely held Ophir Gold Ltd. The proposal will enable Glass Earth to test for possible extensions of structures in adjacent permits, it said. The shares fell 1 cent to 8 cents yesterday and are down almost 40% this year.

NZ Refining (NZR): The nation’s only oil refinery’s second-half performance will be hurt by “a relatively strong New Zealand dollar, continuing pressure on margins and our planned four-week shutdown in September,” chairman David Jackson said. First-half profit fell 2.8% to $52.5 million and it won’t pay a dividend. The stock dropped 5.8% to $6.50 yesterday.

Seeka Kiwifruit Industries (SEK): Chief executive Michael Franks told shareholders at their annual meeting yesterday that the company has sufficient cashflow to allow a dividend of 20 cents for the current year. Earnings before one-time items are expected to be “close to last year,” he said, according to presentation notes. The shares trade infrequently and were last at $2.60 on July 24.

Businesswire.co.nz

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