Stocks to watch: Contact, FPA, GMT, NZS, NZR, NZX, TEL

Tuesday 25th May 2010

Contact Energy has completed it's new geothermal power station near Taupo ahead of schedule and under budget. Telecom mulls structural separation as it looks to shift some burden back to the Government. NZX gets approval for new employee share scheme.

Contact Energy (NZX: CEN ): The biggest utility on the NZX 50 said it has completed its new $100 million, 23 megawatt Tauhara One geothermal power station near Taupo, three weeks ahead of schedule and under budget. The power station will provide enough baseload renewable energy to power approximately 23,000 homes. The shares rose 2 cents to $5.97 yesterday.

Fisher & Paykel Appliances (NZX: FPA ): Haier, the Chinese home goods maker that bought a 20% stake in the company last year, says it doesn’t plan to increase its holding any time soon. FPA has opened its first store in China as it seeks to use the relationship with Haier to tap the world’s most populous nation. The shares rose 1 cent to 58 cents yesterday.

Goodman Property Trust (NZX: GMT ): The listed property developer is expecting the recent budget announcements to have a 5 – 10% impact on after tax earnings across the whole sector. Goodman chief executive John Dakin, speaking to BusinessDay said the review of chattels announced in the budget is a big concern, with the budget review spurring fears that depreciation might also be wiped out on fitouts. Goodman shares remained steady yesterday at 93 cents.

NZ Farming Systems Uruguay (NZX: NZS ): Singapore-listed global agricultural company Olam International said in the NZ Herald that it would take an active role in managing the South American based business. Olam increased its shareholding to 18.45% last week after buying 10 million shares from the Rural Portfolio Investments receivers. “Uruguay has the potential to be one of the world’s most cost-competitive milk producers,” Olam said. NZS shares rose one cent yesterday to close at 41 cents.

New Zealand Refining (NZX: NZR ): New Zealand’s petrol prices are the fourth lowest in OECD countries according to a Ministry of Economic Development analysis. In defending the proposed July 1 introduction of the Emissions Trading Scheme, Prime Minister John Key said it would help prepare New Zealand for the inevitable pricing of carbon emissions throughout the world economy. New Zealand could either move gradually to include carbon pricing into the economy, or take a one-off price shock at some future time when it was no longer possible to avoid carbon costs Key said. New Zealand Refining shares rose five cents yesterday to $3.38.

NZX (NZX: NZX ): The operator and regulator of New Zealand’s stock exchange is to set up a new employee share scheme, allowing it to offer selected senior employees non-participating redeemable shares at a set price. Directors of the bourse operator won’t be allowed to participate in the plan, which excludes only chief executive Mark Weldon. Its shares fell 10 cents from Friday’s trade to close at $1.55.

Telecom (NZX: TEL ): The biggest phone company on the NZX sank 1.5% to $1.96 yesterday after announcing it is mulling structural separation so it can bid for the government’s $1.5 billion high-speed broadband rollout. Such a move could result in a downgrade of its ‘A’ credit rating, says Standard & Poor’s. The shares sank as low as $1.92 during intraday trading yesterday, the lowest since the early 1990s.

Economic themes of the day: US stocks fell as investors preferred the safety of fixed-income securities while they assess developments in Europe's debt crisis.

The dollar index, which measures the greenback against a basket of six major currencies rose 0.99% to 86.21.

The Kiwi dropped to 66.92 cents against the greenback overnight, from 67.35.

The Reserve Bank's survey of inflation expectations today will show where banks and financial institutions see the two-year track of New Zealand's consumer price index, though the latest dataset won't include the stimulatory effects of the budget's tax cuts and hikes on GST.

Businesswire.co.nz

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