Stocks to watch: Allied, AIA, GPG, NZO, PPL

Wednesday 3rd March 2010

The following stocks may be active on the New Zealand exchange after developments since the close of trading yesterday.

Themes of the day: Prices for milk powder unexpectedly edged up in Fonterra’s latest online auction, with the average contract price for whole milk powder climbing 0.8%, the first gain this year, suggesting prices have found a base after two months of decline. Stocks in the US were marginally higher, with the Standard & Poor’s 500 Index climbing 0.3% as concerns eased about a meltdown in Greece. The kiwi dollar was little changed at 69.55 US cents. Australian gross domestic product for the fourth quarter is out today and is expected to show quarterly growth of 0.9% for an annual expansion of 2.4%.

Allied Farmers (ALF): The finance company this week released a valuation that showed Hanover and United assets it paid for with $400 million of its own shares are worth less than half that amount now. The assets have slumped to $175.5 million under NZ IFRS reporting, from a gross realisation value of $396 million at the time the deal was announced last year. The stock sank 15% to 8.5 cents yesterday.

Auckland International Airport (AIA): The nation’s busiest gateway yesterday reported a 3.8% rise in international passenger volumes while domestic volumes jumped 11.8% from a year earlier. Arrivals from Australia climbed 17% and those from Japan and South Korea jumped 22%. The stock gained 1.6% to %1.90 yesterday.

Guinness Peat Group (GPG): The investment group yesterday gained 3.5% to 90 cents, matching the highest closing level since January 11. This week, GPG said a “value return” to shareholders is top priority. While Coats, its biggest investment, had a loss of three million pounds, this reflected timing of tax and the threadmaker’s “strong” cash flow enabled it to repay debt.

New Zealand Oil & Gas (NZO): The oil company is rated ‘market perform’ by ASB Securities analyst David Boyce, according to the ShareChat website. Its financial support for 29.5% owned Pike River Coal has dented earnings and the 10% interest it will be paid on the convertible bonds doesn't reflect the risk or what Pike would have to pay a third party lender. The shares were unchanged at $1.53 yesterday. Pike (PRC) was unchanged at 86 cents.

Pumpkin Patch (PPL): The children’s clothing chain yesterday rose 4.5% to $2.09, the highest close in two years, after reporting a 50% gain in first-half profit, on reduced losses in the US and UK, and lower interest costs. Operating revenue fell 8%.

Businesswire.co.nz

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