Stocks to watch: Infratil, Lion Nathan, Telecom

Friday 17th July 2009

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

Themes of the day: Shares rose for a second day on Wall Street after JPMorgan Chase & co. posted a 36% gain in second-quarter profit. The kiwi dollar, which shed almost a cent against the greenback after Fitch ratings lowered the nation’s credit rating outlook, rebounded as risk appetite rose. It was recently at 64.77 US cents. US homebuilders’ confidence rose to the highest level since September.

Delegat’s Group (DGL): The winemaker’s Oyster Bay brand is outperforming the industry, according to Adrian Allbon, an analyst at Goldman Sachs JB Were who rates the shares a “buy,” the Share Chat website reported. Allbon says Delegat management “continues to execute well in a difficult environment." The shares were unchanged at $2.05 yesterday.

Fletcher Building (FBU): The US National Association of Home Builders/Wells Fargo index of builder confidence jumped to 17 in July from 15 last month, a sign that housing activity in the world’s biggest economy may be starting to thaw. A reading below 50 means most respondents view conditions as poor. Fletcher, which operates the US based Formica laminated board business, soared 17 cents to $6.84 yesterday.

Infratil (IFT): The investment group is set to sell its 90% stake in Germany’s Lubeck airport, using an option in its purchase agreement to divest the holding if passenger numbers didn’t meet targets. The shares fell 3 cents to $1.71 yesterday.

Lion Nathan (LNN): Australia’s second-largest brewer said it will meet its profit target this year of between A$305 million and A$315 million. Major shareholder Kirin Holdings gained Overseas Investment Office approval to mop up the 54% of the company it doesn’t already own. The shares rose 1.3% to $14.58 on the NZX yesterday.

Mainfreight (MFT): The trucking company was raised to ‘neutral’ from ‘underperform’ by Credit Suisse, according to the NZ Herald. A decline in freight volumes is levelling off, the report said. Analyst Kar Yue Yeo forecasts a 51% drop in quarterly earnings to $4.2 million. Analysts rate the stock ‘outperform,’ based on the average of analyst recommendations compiled by Reuters. The shares fell 1 cent to $4.08 yesterday.

New Zealand Oil & Gas (NZO): Crude oil rose to its highest level in a week in New York as stocks extended their gains and amid optimism the recession will abate this year. Crude oil for August delivery rose 0.8% to US$62.02 a barrel on the New York Mercantile Exchange. The shares rose 1 cent to $1.56 yesterday.

Telecom Corp. (TEL): The largest listed phone company has been accused by its rivals of anti-competitive behaviour after offering wholesale customers in the central North Island a discount deal on phone lines and broadband, the Independent reported. Orcon Internet and Vodafone New Zealand claim the requirement to serve at least 90% of their customers with Telecom products is unfair. The shares gained 1.9% to $2.69 in trading on the exchange yesterday.

Businesswire.co.nz

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