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Stocks to watch: Telecom reaches $1.7m settlement

Friday 9th July 2010

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Telecom has reached a $1.7 million settlement over loyalty offers for its wholesale broadband service, Auckland Airport's shares were unchanged after announcing it was buying 25% of Queenstown airport and L&M Energy shares rise on news that its well in Southland contains coals fully saturated with gas.

Telecom (TEL): The phone company has reached a $1.7 million settlement with the Commerce Commission over loyalty offers for its regulated wholesale broadband service, used by competing service providers to provide broadband service to retail customers. The company offered substantial discounts in return for a commitment from service providers to maintain current and future customers on Telecom Wholesale's service rather than that of a competitor, the commission said. The shares rose 1 cent to $1.87 yesterday.

Auckland International Airport (AIA): The nation’s busiest gateway yesterday said it had bought a 25% stake in Queenstown Airport for $27.2 million. The purchase will be funded from existing cash resources. Shares in the company were unchanged yesterday at $1.93.

L&M Energy (LME): The coal gas development company said yesterday that its OM-4 well in Southland contains coals that are fully saturated with gas, amounting to as much as 11 cubic metres of gas per tonne of coal. The shares rose to 13.5 cents from 12 cents yesterday and have slipped about 12% this year.

National Property Trust (NAP): The trust would initially save $550,000 a year by buying out its management contract and converting to a regular NZX-listed company, according to one of the advisors hired to assess the proposal. Additional savings would come from no longer having to pay a performance fee to an external manager, Northington Partners said in its report. The trust’s units fell 1.9% to 51 cents yesterday.

Skellerup Holdings (SKL): The manufacturer is rated ‘accumulate’ by John Cairns, an analyst at Forsyth Barr, according to ShareChat. "Trading conditions over the June quarter in the industrial division have been particularly buoyant and provides vindication of the strategy to focus on global technical polymer products," Cairns says. The shares rose 2 cents to 71 cents yesterday.

Themes of the day: Stocks on Wall Street rose for a third straight session after retailers posted better-than-expected sales and Labor Department figures showed a drop in initial claims for state unemployment benefits, boding well for the recovery in the world's biggest economy. Locally, electronic card transaction data for June is due out this morning, having gained for four straight months. The New Zealand dollar held above 70 US cents for a second day.

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