Stocks to watch: Auckland Airport, Air NZ, OceanaGold

Wednesday 6th October 2010

Auckland Airport is proposing an increase in directors' fees by 12.2%, Air New Zealand's profit outlook is strong despite the tough economic conditions and shares have been rated 'buy', while OceanaGold has completed its capital raising one day after it was announced.

Auckland International Airport (AIA): The New Zealand Shareholders' Association has voiced its objection to the airport’s proposed 12.2% increase in directors' fees, according to press reports. The rise will lift total remuneration for the eight AIA directors by $140,000 a year to $1.29 million. Shareholders will vote on the increase at the company’s annual general meeting this month. Shares rose 0.5% yesterday to $2.08 ahead of its dividend payment today.

Air New Zealand (AIR): The national carrier’s profit outlook is strong despite the tough economic conditions and is rated ‘buy’, according to Forsyth Barr analyst Rob Mercer, quoted on the ShareChat website. Among the airline's positives is it is increasing capacity as its competition is pulling back, it has the first of three new B777:300 aircraft arriving between November and March 2011, stable fuel prices and a return of growth from inbound tourist arrivals, Mercer said. Shares fell 0.8% yesterday to $1.29.

OceanaGold (OGC): The gold miner announced that it has completed its C$115.5 million capital raising, one day after it was announced. The company entered into an agreement with Macquarie Capital Markets Canada and Citigroup Global Markets Canada to sell them special warrants and ASX-listed shares at the equivalent price of C$3.50 a share, a discount of 9.1% from its price on the Toronto Stock Exchange. Each warrant will entitle the holder to receive one TSX listed OceanaGold share. Shares were unchanged yesterday at $5.02.

Pyne Gould (PGC): The financial services firm said it will undertake a strategic review to determine its future once the proposed South Island bank merger is complete. Marac, PGC’s finance unit, has the lead role in a proposed merger with Canterbury and Southern Cross Building Societies to create a locally owned and publicly listed bank, after the new holding company’s board and executive were named on the presumption the merger gets regulatory and investor approvals. Shares fell 2.3% to 42 cents yesterday.

Skellerup Holdings (SKL): The rubber goods and milking equipment group is set to make its dividend payment today. Last month the company reported a 33% rise in net income to $11.96 million in the 12 months ended June 30, beating its guidance after a recovery in second-half trading. Shares were unchanged yesterday at 94 cents.

Tower (TWR): Fidelity Life Assurance says its biggest shareholders, with 70% of the company, plan to reject rival Tower unsolicited $118 million cash and scrip takeover offer. Fidelity shareholder Farmers Mutual Group, which holds 10.8% of Fidelity, said it is opposed to the bid on the grounds that it is undervalued and posed a risk to the life insurer’s proven business model. Tower’s shares fell 1.6% yesterday to 66 cents.

Themes of the day: Optimism returned to equity markets in Europe and on Wall Street after the Bank of Japan cut interest rates and opened the door for more easing by other central banks. The Standard & Poor's 500 Index rose 2% to 1,160.7 and the Stoxx Europe 600 Index climbed 1.3% to 261.18, its biggest gain in at least a month. Prices slipped 1.3% at Fonterra Cooperative Group's latest online auction of milk powder, holding near a four-month high and keeping intact one of the pillars of New Zealand's terms of trade. The New Zealand dollar is nearing 75 US cents. The kiwi also gained after the Reserve Bank of Australia unexpectedly kept its target cash rate at 4.5%, polishing the relative appeal of New Zealand's currency.

Businesswire.co.nz

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