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Stocks to watch: AMP, Briscoe, Ebos

Friday 6th August 2010

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AMP looks to have renewed competition for its AXA bid, shares of which were put in a trading halt on the Australian stock exchange yesterday, Briscoe reported a 2.6% increase in unaudited sales and Ebos looks set to rid itself of debt through the sale of its science buusinesses.

AMP (AMP): Takeover target AXA Asia Pacific was put in a trading halt on the Australian stock exchange after the insurer and fund manager said it was still in talks with the Australian Competition and Consumer Commission over National Australia Bank’s rival bid for the unit. AMP’s bid was cleared by both New Zealand’s and Australia’s regulators, while NAB’s was blocked by the ACCC. Shares in AMP climbed 1.2% to $6.83 on the NZX yesterday.

Briscoe Group (BGR): The retailer today announced unaudited sales for the six months ended August 1 of $190.1 million, up 2.6% from a year earlier. Homeware sales rose 1.7% and sporting goods gained 4.5%. Same-store sales rose 2.5%. The shares traded at $1.20 yesterday. 

Ebos (EBO): The medical supplies distributor yesterday announced it will sell its trans-Tasman science businesses to American firm VWR International, allowing it to erase all of its debt. “The transaction will be value-positive for Ebos shareholders both in terms of a gain on sale from the transaction and the resultant cash flow,” it said. The stock rose 4.2% yesterday to a record close of $6.70.

Kathmandu Group (KMD): The outdoor equipment retailer fell 3.3% to $1.76 yesterday, bringing its two-day slide to more than 15% after it said gross margins fell short of last year’s forecast at 63%, which is below both the 64.4% result in the previous year and 64% prospectus figure.

Millennium & Copthorne Hotels NZ (MCK): The hotel company reported a loss of $20.2 million for the six months ended June 30, mostly reflecting a $26.8 million one-off, non-cash hit to reported earnings caused by tax changes to depreciation of commercial buildings. The group also booked losses of $5.3 million on "fees and monies believed to have been misappropriated" the former chief executive of Millennium's Chinese property partner. The shares last traded at 40 cents on August 3. 

Telecom (TEL): The phone company has been granted a reprieve from regulation on two of its unbundled local loop exchanges after the Commerce Commission’s draft report on competition of backhaul services. The review assessed 25 links that were unbundled since the last review, and found they face no competition and will need to be regulated. The shares rose 1 cent to $2.02 in trading yesterday.

Themes of the day: The New Zealand dollar fell below 80 Australian cents for the first time in 10 weeks after figures yesterday showed the jobless rate climbed back up to a 10-year high 6.8%, reducing pressure on the central bank to hike interest rates aggressively. Stocks on Wall Street were mixed after Labor Department figures showed a rise in jobless claims.

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