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Stocks to watch: Affco, AMP, Comvita

Thursday 7th October 2010

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Talley's has reached a 90.5% holding in Affco, allowing it to mop up the remaining shares, AMP NZ Office is proposing changes to better align interests of the manager with unitholders, while Comvita looks set to post a first-half loss after a patent infringement in the UK.

Affco Holdings (AFF): The Talley's family reached an unassailable holding in Affco Holdings, at 90.5%, allowing the diversified food group to mop up the remaining shares. The stock last traded at 36 cents. 

AMP NZ Office Trust (APT): The prime office space investor's proposed governance changes should better align the interests of the manager with those of unitholders, according to Craigs Investment Partners, quoted on the ShareChat website. Unitholders will vote later this month on turning the trust into a company and changing the management fee structure. AMP's manager is currently paid a flat fee of 0.65% of trust assets. The proposal would lower this to 0.55% for the first $1 billion of assets and 0.45% thereafter. Shares fell 1.3% yesterday to $1.10. 

Comvita (CVT): The medical honey products developer yesterday said it will post a first-half loss on legal costs relating to a patent infringement case in the UK, weaker sales and changes to New Zealand tax laws. The net loss was $2.2 million for the six months to September 30, down from a profit of $1.6 million for the same period last year. The shares fell 5.5% yesterday to $1.90. 

Kiwi Income Property Trust (KIP): The property investor said in an update for unit-holders that provided the New Zealand economy recovers as expected, "this should be positive for employment and income growth, and is also likely to result in an improved trading environment for the Trust's shopping centres." The units were unchanged yesterday at $1.04. 

NZ Oil & Gas (NZO): The energy exploration and production company is expected to benefit from stronger energy prices. Crude oil hit a five-month high overnight as the weaker US currency and a larger-than-expected drawdown in US gasoline stockpiles prompted investors to bid up energy futures. US crude for November delivery rose 45 cents to US$83.27 a barrel, up for the fifth day in six. Shares rose 0.8% yesterday to $1.33. 

OceanaGold (OGC): The continued dollar weakness pushed gold to another record high. Spot gold rose as high as US$1,349.80 an ounce overnight, up from US$1,338.70 late in New York on Tuesday. US gold futures also rose to a record, climbing to US$1,351 an ounce, before recently trading US$8.10 higher at US$1,348.50 an ounce. Shares in the gold miner fell 1% yesterday to $5. 

Widespread Energy (WEN): The minerals investment group said it is set to deliver its first year progress report on the Chatham Rise rock phosphate project before the end of the year. Widespread gained a one-year prospecting permit in February to explore the commercial prospects of deposits in an area on the Chatham Rise. The area may contain as much as 100 million tonnes of rock phosphate, an essential ingredient in fertilizer, which could be worth $28 billion. Shares rose 7% on the NZAX yesterday to 15 cents. 

Themes of the day: Equities on Wall Street declined after the ADP survey of private payrolls showed America unexpectedly shed jobs last month. The survey comes before the widely watched US non-farm payrolls report on Friday. The New Zealand dollar rose above 75 US cents for the first time since October 2009, after the greenback weakened further on speculation that the Federal Reserve with implement another round of quantitative easing next month.

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