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Stocks to watch: Air NZ in the clear

Wednesday 30th June 2010

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Air New Zealand has been cleared of any responsibility for the 2008 Airbus crash off southern France, while GPG continues to take a beating after dumping its executive director Tony Gibbs yesterday and OceanaGold also looks to be coming under scrutiny after expanding its exploration budget.

Air New Zealand (AIR): The 2008 crash of an Airbus A320 plane into the Mediterranean Sea off southern France was found to be due to pilot error and no criminal charges will be laid, Agence France-Presse reported. Seven people died in the crash, which an inquiry has found was not due to malfunctioning flight monitors. The shares fell 1 cent to $1.10 yesterday.

Guinness Peat Group (GPG): The investment group fell 2.9% to 66 cents yesterday after announcing it had dumped executive director Tony Gibbs after he broke ranks and publicly criticized its demerger plans. The stock price rallied last week after Gibbs' statement, having declined previously as investors voiced their displeasure with the plan to spin off GPG's Australian assets.

OceanaGold (OGC): The gold mining company said yesterday it would assess the prospects of underground mining at Reefton and look at expanding its current opencast pit. The move will force the company to increase its exploration budget from US$2.8 million for 2010 to US$7.2m for 2010/2011, according to a company statement. The shares fell 3.3% to $4.45 yesterday.

Rakon (RAK): AMP Capital Investors disclosed yesterday that it had increased its holding in the manufacturer of parts of navigation systems to about 6.9% from 5.5%. The stock was unchanged at 88 cents yesterday and has tumbled 22% this year, almost three times the decline of the NZX 50 Index.

Fisher & Paykel Healthcare (FPH): The company is rated a ‘buy’ by Craigs Investment Partners, according to the ShareChat website. The stock offers valuation appeal, the brokerage said, assuming it can meet its growth targets. The shares rose about 1% to $3.12 yesterday.

Genesis Research (GEN): The biotech company which suspended its New Zealand operations last month after running out of cash, sold 7.4 million shares at 6 cents apiece, raising $446,278, to a group of investors represented by UBNZ Funds Management, businesswoman May Wang’s company. Shares of Genesis fell 40% to 3 cents yesterday.

Horizon Energy Distribution (HED): Marlborough Lines is resuming its foray into the North Island company, seeking to buy enough shares to lift its stake to 15% from 10.1%. Marlborough appointed First NZ Capital to acquire up to 1.2 million shares in Horizon at $4.06 apiece, a 1.5% premium to their trading price yesterday. The NZX has established a so-called special order facility with a temporary code for shares sold to the brokerage of HEDY.  The shares traded unchanged at $4 yesterday.

New Image Group (NEW): The manufacturer of health tonics based on bovine colostrum fell 6.3% to 30 cents yesterday, a day after being asked to explain by the NZX why its stock had tumbled 16% since the start of trading on June 23. The company said it could explain the decline. Still, New Image said its shares are undervalued and that it may re-introduce its share buy-back programme.

Themes of the day: Global stockmarkets were sent into a tailspin yesterday after New York researcher Conference Board revised down its economic indicator for China, raising the spectre of a double-dip recession if the world's third biggest economy can't keep driving world growth.

The Standard & Poor's 500 index sank 3.1% near 1,040, a key technical level that's already provided support four times this year. The kiwi dollar sank below 70 US cents to 69.27 cents, erasing its gains over the past fortnight, amid the subdued global outlook. Europe's sovereign debt fears are re-emerging with 442 billion euros owed to the European Central Bank due on Thursday from lenders that used its 12-month liquidity facility.

The owners of dairy exporter Fonterra will vote on proposals to change the company's capital structure and let shareholders trade among themselves.

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