Stocks to watch: ANZ, Air NZ, Affco

Thursday 23rd September 2010

ANZ is facing legal action in Australia over its exception fees, including charges for insufficient funds, Air NZ's chief says opposition to its alliance with Virgin Blue could threaten the airline's future, while Talley's extends its takeover offer for Affco until the beginning of November.

Air New Zealand (AIR): Rob Fyfe, the national carrier’s chief executive, told a business audience in Sydney the Australian antitrust watchdog’s opposition to Air New Zealand’s alliance with Virgin Blue would threaten the airline’s future, according to media reports. Fyfe said the alliance was a “central plank” to Air NZ’s strategy and the preliminary finding was a “threat to our future.” The shares were unchanged at $1.29 yesterday.

Australia & New Zealand Banking Group (ANZ): The country’s biggest lender said it will “vigorously” defend legal a class suit in Australia over its exception fees, which includes charges for insufficient funds, overdrawn bank and credit card accounts, and late credit card payments. Australia’s biggest litigation funder, IMF Australia, is bank-rolling the bid to recoup as much as A$5 billion. The shares

Affco Holdings (AFF): New Zealand's fourth-biggest meat processor and exporter endorsed a takeover offer from major shareholder Talley's Group, which has declared its proposal unconditional. Talley's extended its offer to November 2. The shares were unchanged yesterday at 36 cents, 1 cent below the offer price.

Fletcher Building (FBU): Formica Group, the underperforming US unit for the country’s biggest construction company, is forecasting annual profits of some $100 million, the New Zealand Herald reported. President and chief executive Mark Adamson is in New Zealand, and said the business could be achieving bigger returns if the global economy was at a more normal level. The shares fell 0.7% to $8.60 in trading yesterday.

Guinness Peat Group (GPG): The investment company showed it had listened to shareholder concerns in appointing four independent directors to review strategic options. The company faced a backlash when it earlier proposed spinning off its Australian assets. The share rose 1.5% to 67 cents yesterday.

Nuplex Industries (NPX): Forsyth Barr analysts John Cairns and Matthew Leach say the specialty chemicals maker would drop down the NZX rankings if it decides to shift its corporate domicile to Australia, the ShareChat website reported. “While Nuplex is not at risk of dropping out of the NZ50 index, it does go into the category of companies (40 to 50 of the index) which are vulnerable to removal as new IPOs or larger companies come through," Cairns and Leach said. The shares were unchanged at $3.46 in trading yesterday, and gained 18% this year.

NZF Group (NZF): The financier’s managing director John Callaghan told shareholders the collapse of South Canterbury Finance and Allied Nationwide Finance has kept investors on edge, and reinvestment rates have been declining. The firm now sources just 15.3% of its funding from debentures. The shares halved to 10 cents in trading yesterday.

Pulse Utilities New Zealand (PLU): The electricity retailer is asking for more cash from its shareholders as it looks to raise up to $3.6 million in a share purchase plan and top-up offer. Shareholders can buy up to $15,000 worth of shares at 44 cents apiece. Pulse has already raised some $10 million through the issue of convertible notes and private placements in the past year. The shares, which trade infrequently, were unchanged at 44 cents yesterday.

Pumpkin Patch (PPL): The children’s clothing retailer returned to profit in its latest year though sales fell 7%. “Pumpkin Patch’s revenue numbers show that trading conditions out there are tough,” said Paul Robertshawe of BT Funds Management. “Anyone expecting near-term earnings upgrades is going to be disappointed.”

Wellington Drive Technologies (WDT): Harbour Asset Management yesterday disclosed it had become a substantial holder of the stock, with 68 million shares, or 10.1% of the company. The stake reflects mandates from various clients and the results of the company’s recent equity raising. The stock rose 2.4% to 8.7 cents yesterday.

Themes of the day: Stocks on Wall Street fell for a second day as investors piled into US Treasuries after the Federal Reserve flagged more asset purchases if inflation continues to stay at low levels. The kiwi dollar climbed above 74 US cents for the first time since January, and recently traded at 73.83 cents. New Zealand's economy probably grew 0.8% in the three months ended June 30, according to a Reuters survey. Fonterra is expected to reaffirm its forecast payout to farmers at between $6.90 and $7.10 per kilogram of milk solids when it announces its annual result today.

Businesswire.co.nz

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