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Stocks to watch: AIR, ALF, NZX, POT, TEL, WFD

Friday 4th June 2010

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Market watchers will be keeping an eye on NZX shares today to see what reaction investors take to news energy companies plan to use an ASX platform rather than a local one for trading purposes. Also Air NZ may benefit from reports that Pacific Blue's future in NZ is clouded.

Themes of the day: Stocks on Wall Street crept higher amid expectations today’s US employment data will show the world’s biggest economy added more than half a million jobs last month, and may encourage the Federal Reserve to start lifting interest rates earlier than anticipated. The kiwi dollar fell 68.30 U.S. cents from 68.80 cents yesterday as ongoing fears about the state of Europe’s financial stability re-emerged, with the region’s banks putting a record amount of cash with the European Central Bank’s ultra-safe overnight deposit facility, which pays a below-average return on funds.

Air New Zealand (NZX: AIR ): The future of Pacific Blue's New Zealand domestic and trans-Tasman operations is under review as part of a plan to turn around the fortunes of parent Virgin Blue, the Press newspaper reported. The shares rose 2 cents to $1.17 yesterday.

Allied Farmers (NZX: ALF ): The finance company that took on the Hanover and United loans books in a debt-for-equity swap last year will pay out $5 million this month to Eric Watson and Mark Hotchin as the purchase agreement, according to a NZ Herald report. Since taking on the loan book, Allied has written down the value of the book to about $124 million after initially valuing the assets at almost $400 million. The shares fell 0.1 cents to 5.2 cents yesterday.

NZX (NZX: NZX ): The bourse operator fell 1.9% to $1.58 yesterday after the country’s five top electricity generators said they would use the ASX to operate a new electricity forward market. NZX has been positioning itself to grow from new derivatives markets, and told an investor presentation in March that it was anticipating half of its revenues to come from derivatives trading in five years time.

Port of Tauranga (NZX: POT ): The port operator announced a hearing panel would recommend Conservation Minister Kate Wilkinson grant it permission to widen and deepen its harbour shipping channels in preparation for the arrival of larger container vessels. The stock rose 0.9% to $6.70.

Telecom (NZX: TEL ): The country’s biggest phone company is out wooing customers to its XT network, with chief executive Paul Reynolds fronting the new ad campaign. Telecom will offer “no-risk trials” after several outages earlier this forced it to publicly apologise to customers and pay some $15 million in compensation. The shares fell to a new low $1.83 in trading on the NZX yesterday.

Wakefield Health (NZX: WFD ): The private hospital operator made a revised takeover offer for Norfolk Investments, the company that owns a controlling stake in Tauranga’s Grace Hospital. Wakefield says it has acceptances for holders of more than 50% of Norfolk. Its revised offer is $3.60 a share, valuing Norfolk at $23 million, up from $22.6 million, and a fully imputed dividend of 10.73 cents, making a total of about $3.71. Wakefield stock was unchanged at $7 yesterday

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