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Stocks to watch: CEN, GFF, GPG, HED, TEL, TLS

Friday 18th June 2010

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Goodman Fielder's unsecured notes offer has been oversubscribed five times over, raising US$300 million, while Telstra has just completed its first issue of bonds in the domestic market since 2006 and Telecom is to refund 1,300 customers who were mislead over a broadband promotion in 2008.

Contact Energy (CEN): The biggest utility on the NZX yesterday published its operational data for May, showing it staunched a loss of customers. Electricity customers held unchanged from the previous month at 476,500, with gas customers unchanged at 64,000 and LPG at 57,000. The stock fell 1.2% yesterday to $5.77.

Goodman Fielder (GFF): The Australia-based foodmaker yesterday announced it had raised US$300 million of unsecured notes in the US Private Placement market, with the transaction five times oversubscribed. The funds will be converted into A$350 million, with repayments hedged in Australian dollars. “We are very pleased with the level of interest and confidence shown by a new group of debt investors in Goodman Fielder,” said managing director Peter Margin. The shares rose 2.4% to $1.70 yesterday.

Guinness Peat Group (GPG): Shares of the listed investment holding company have declined since that announcement that it plans to spin off its Australia assets into a separate listed business. “Some people in the market were expecting a better return of capital,” said Shane Solly, portfolio manager at Mint Asset Management. Still, “there is still some room for optimism on the Coats side of the business in terms of their long-term prospects. It is just going to take a little longer for them to deliver.” The stock sank 4.6% to 63 cents yesterday.

Horizon Energy Distribution (HED): Marlborough Lines's stand in the market for up to 10.1% of the shares edged nearer to success yesterday, with the announcement that it now holds 9.24% of the company. Marlborough is paying $4.15 a share, or $4.06 excluding the next dividend payment. The shares fell 2.4% to $4.06 yesterday.

Telecom (TEL): The biggest phone company on the NZX 50 Index will refund 1,300 customers who may have been misled by a broadband promotion in 2008 after an investigation by the Commerce Commission. The settlement follows complaints from some that the "Get Telecom Broadband at Dial Up Prices" campaign failed to disclose the true cost and data restrictions of the plan, according to a statement from the commission today. The total cost opf the settlement is $195,000. Telecom fell 6 cents to $1.86 yesterday and have declined 30% in the past 12 months. 

Telstra (TLS): Australia’s largest phone company has completed its first issue of bonds in its domestic market since 2006, with the sale of A$150 million of 10-year 7.75% bonds. The company abandoned plans for a similar sale last November after failing to agree terms with investors, Bloomberg reported. The latest sale was in response to requests from local investors, sale manager National Australia Bank said. The shares edged up 0.3% to $3.93 on the NZX yesterday.

Themes of the day: Shares on Wall Street staged a late rally to finish up on the day, even after data showed a rise in new jobless claims and a drop in manufacturing activity in the Mid-Atlantic States. The New Zealand dollar advanced, climbing above 70.50 U.S. cents for the first time in a month, after Spain's latest sale of government bonds met with strong demand, easing concerns about a widening European debt crisis.

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