Stocks to watch: New Zealand equity preview

Monday 29th September 2008

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

Themes of the day: US lawmakers yesterday approved a $700 billion plan to revive liquidity in credit markets and buy up bad debt from finance companies. OneSteel offered to acquire Steel & Tube Holdings. Merchandise trade figures for August are due today, with the monthly deficit forecast to widen to NZ$912 million from NZ$781 million. Crude oil for November delivery fell 1.1% to $106.89 a barrel on the New York Mercantile Exchange on Friday.

Charlie's Group (CHA): The juice and soda company
has a "strong platform" and should start leveraging the benefits of its investments this year, chairman Ted van Arkel said in the company's annual report. The company posted a net loss of NZ$425,000 last year. The shares have fallen 36% this year and traded Friday at 11 cents.

Fletcher Building (FBU): AXA Asia Pacific Holdings on Friday disclosed it has become a substantial security hold of the construction company, with a stake of 5.04%. The shares have fallen 37% this year, dropping1.9% to NZ$7.21 on Friday. The shares are rated a "buy" or "outperform" by nine of 11 analysts who follow the stock. Two rate it a "hold."

Infratil (IFT): The investment group is vying for a NZ$41 million Auckland Regional Transport Authority tender out to create a public transport ticketing system for the region, the Sunday Star-Times reported. Infratil has already rolled out its Snapper payment cards in Wellington. It is up against Downer EDI, which designed and operates Perth's SmartRider smart card system, the report said. Infratil fell about 1% to NZ$2.05 on Friday and is down 26% this year.

NZ Farming Systems Uruguay (NZS): Parent company
PGG Wrightson (PGW) said after the market closed on Friday that it acquired 14 million shares of NZ Farming Systems from Rural Portfolio Investments and interests associated with Murray Flett for NZ$1.50 apiece. The vendors sold the stock to participate in Wrightson's own share placement, it said. NZ Farming Systems stock fell 2.9% to NZ$1.36 on Friday. Wrightson fell 13% to NZ$1.83 after raising capital at NZ$1.80 a share, a 14% discount.

Steel & Tube Holdings (STU): OneSteel offered NZ$4 a share to acquire Steel & Tube, valuing the target at NZ$353 million. The offer represents a 33% premium to its price on Friday.

Widespread Portfolios (WID): Asian Mineral Resources announced in Canada on Friday that it has suspended activities at its Ban Phuc nickel project in Vietnam because of a lack of funding. It blamed market conditions and uncertainty about Vietnamese policies on nickel royalties and exports. Widespread's stake in Asian Mineral represents 42% of its total assets. Its stock last traded at 30 cents on September 15.

By Jonathan Underhill

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