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Stocks to watch: Diligent, DNZ Property, Ecoya

Monday 18th October 2010 1 Comment

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Diligent completed a three million share placement on Friday, DNZ Property's chief executive landed his second bonus in as many months, while Ecoya raised additional funds last week to complete its buyout of Trilogy.

Diligent Board Member Services (DIL): The software support services company on Friday completed a $1.86 million share placement of 3 million ordinary shares at a price of $0.62. The proceeds of the placement will be used fund future growth initiatives. Shares were unchanged on Friday at 67 cents.

DNZ Property Fund (DNZ): The property investor’s chief executive Paul Duffy has landed his second bonus in as many months, after the property investor's stock met a performance target. Duffy received 1 million shares on Friday after the stock held above $1.17 for five trading days. The latest bonus brings his total bonus shares to 1.7 million, worth $2.1 million at the close last week. Shares rose 1.7% on Friday to $1.22.

Ecoya (ECO): The global candle and fragrance distributor raised additional funds last week to complete its previously announced buyout of Wellington-based natural skincare company Trilogy. The $10 million payment, to be made of $5m cash and half in Ecoya shares issued at $1 each is contingent on 2011 calendar year target EBITDA being achieved before the full payment will be made. Shares fell 2.6% on Friday to 76 cents.

Fletcher Building (FBU): The company’s Formica business is trading well in the current economic climate and has improved and stabilised earnings, according to Forsyth Barr analyst Rob Mercer, quoted on the ShareChat website. The restructuring over the past year has greatly improved Formica's product quality and service levels, and could achieve its targeted $100 million in earnings before interest and tax by the year ending June 2013, earlier than expected, Mercer said. Shares fell 0.4% on Friday to $8.35.

New Zealand Oil & Gas (NZO): Crude oil fell to the lowest level in two weeks as the dollar strengthened, curbing the appeal of commodities as an alternative investment. Crude for November delivery fell 1.7% to $81.25 a barrel on the New York Mercantile Exchange. Prices have dropped 1.7% percent since October 8, their first weekly decline in four weeks. Shares fell 0.7% on Friday at $1.34.

Telecom (TEL): Last week the Commerce Commission launched an investigation into whether Telecom’s wholesale unit discriminated against its retail rivals, breaching the terms of its operational separation. In July, Telecom agreed to pay $1.7 million to its rivals and the regulator after reaching a settlement of a wholesale loyalty offer that was bound for the High Court. Had the phone company lost, it faced fines of up to $10 million for each breach. Shares fell 0.5% on Friday to $2.07.

Themes of the day: The US Federal Reserve looks set to implement another round of asset purchases, after chairman Ben Bernanke hinted on Friday that he is in favour of using quantitative easing in a bid to jump start the US economic recovery. While light on detail, the news saw stocks gain on Wall Street. The Standard & Poor's 500-stock index rose 0.7%, and climbed 1% last week, hitting a five-month high on October 13. The kiwi fell to 75.58 US cents from 75.88 cents on Friday. New Zealand consumer price index data is set to be released today, and is expected to show inflation accelerated to 1% in the quarter. The BNZ-Business NZ performance of services index data is also due out today.

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Comments from our readers

On 18 October 2010 at 5:36 pm Colin said:
Will Paul give some bonus money back if the share price drops for a protracted period.
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