Stocks to watch: Air NZ, F&P Appliances, Freightways

Tuesday 18th August 2009

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

Themes of the day: Stocks tumbled around the globe amid concern the pace of recovery from global recession will be slower than some had hoped. The Dow Jones Industrial Average and Germany’s DAX 30 declined 2%. China’s Shanghai Composite Index tumbled 5.8% yesterday. Prices of crude oil and commodities dropped.

Air New Zealand (AIR): The national carrier will be hoping to benefit from any streamlining of the trans-Tasman flights, after Prime Minister John Key signalled an announcement will be made this week after he meets with his Australian counterpart in Canberra on Thursday. The goal is to make trans-Tasman flights as easy as domestic travel, and Key said the changes could be in place by the end of this year. The airline’s stock climbed 3.2% to $1.29 in trading yesterday.

F&P Appliances (FPA ): Chief executive John Bongard is to step down after a 36 year career with the company after revealing he had been battling prostate cancer for more than a year. Bongard stunned shareholders with the news in an emotional announcement not referred to in documents filed with the NZX for the company's AGM yesterday. The stock dropped 5.9% to 80 cents yesterday.

Freightways (FRE): The shares tumbled 8.8% to $3.10 yesterday, the biggest decline on the NZX 50, after the courier company announced a drop in its dividend payment and weaker trading. The courier company will raise more capital via a dividend reinvestment plan that’s underwritten by Forsyth Barr. “Freightways is a reasonable barometer of what’s happening in the economy,” said Stephen Walker, head of asset management at Goldman Sachs JBWere. “The immediate outlook is for weaker trading.”

Hallenstein Glasson Holdings (HLG): The clothing chain was upgraded to ‘hold’ from ‘sell’ by Buffy Gill, an analyst at Goldman Sachs JB Were, the ShareChat website reported. Gill said the retailer’s second-half sales beat expectations, with the first increase since February 2006, on a same-store basis. She predicts positive earnings momentum as the New Zealand and Australian economies recover, though that will be countered by intense rivalry in the apparel market. The shares were unchanged at $2.90 yesterday.

Infratil (IFT): The investment group’s operating profit will be at the low end of its forecast range this year as earnings from its European Airports unit and Australian energy business undershoot expectations, chief executive Marko Bogoievski told shareholders at their annual meeting yesterday.

“Operating income last year was up by 13% to $356 million, and in March was projected to increase this year by between 5% and 12%,” he said. “It now seems likely that the outcome will be closer to the lower end of that forecast range.” The shares fell 0.6% to $1.81 yesterday.

New Zealand Oil & Gas (NZO): Crude oil sank to a two-week low as the US dollar gained and stock markets worldwide fell. Crude oil for September delivery dropped 1.4% to US$66.60 a barrel on the New York Mercantile Exchange. The shares were unchanged at $1.64 yesterday.

Businesswire.co.nz

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