Stocks to watch: Kathmandu, Windfarms, PGW, AIA, CAV, TEL

Monday 22nd March 2010

Kathmandu shares continue their advance and New Zealand Windfarms' shares tumble as it plans a $34m rescue rights issue. PGG Wrightson was the biggest gainer on the NZX50 Friday and Telecom shares sink lower. Data due to be released this week isn't likely to change the central bank’s expectation of a mid-year hike to the official cash rate.

Kathmandu Holdings (NZX: KMD ): The shares have advanced for two days straight after the outdoor equipment chain last week beat its prospectus earnings forecast. The shares climbed 8.7% to $2.38 on Friday.

New Zealand Windfarms (NZX: NWF ): The company plans to raise $34.1 million in a deeply discounted eight-for-three cash issue that the company says must succeed "or the consequences will be dire." The company is anticipating a shortfall and has called a special general meeting on April 6 that would allow 20% shareholder Vector to own as much as 39.9%. The shares tumbled 18% to 32 cents on Friday.

PGG Wrightson (NZX: PGW ): With farm sales at low ebb, the rural service company increased its market share in transactions of economically viable farms, showing a shift in the way the market is operating. It was the biggest gainer on the NZX50 Friday, with the shares climbing 3.5% to 59 cents.

Telecom (NZX: TEL ): The nation's biggest phone company is "one of the most adversely impacted incumbent telcos we've seen," said J.P. Morgan analyst Laurent Horrut, according to the NZ Herald. "The government seem to be going after any measures that, from their point of view, could improve the competitive environment." The shares sank 1.9% to $2.11 on Friday, the lowest since the early 1990s.

Auckland International Airport (NZX: AIA ): The company’s shares rose on Friday after a Statistics New Zealand release showed a 2.5% increase in overall inbound tourism, with a jump in Australian visitors. It gained 2.1% to $1.95.

Cavalier (NZX: CAV ): The carpet maker said in its interim report that the adverse market conditions have “bottomed out, and we are cautiously optimistic that we will see a gradual lifting of revenue here.” The company lifted the bottom of its forecast range for annual earnings to $14.5 million from $13.5 million, while keeping the top of the range at $15.5 million. It earned $13.7 million a year earlier. The shares gained 2.1% to $2.86 on Friday.

Economic themes of the day: Data this week is expected to show the economy accelerated in the fourth quarter, while the annual current account gap shrank, keeping intact the central bank's expectation of a mid-year hike to the official cash rate.

Shares weakened on Wall Street on Friday, amid renewed fears of a default by Greece. The kiwi dollar traded at 70.80 US cents.

Businesswire.co.nz

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