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Stocks to watch: FBU, GFF, NZF, PPL, VCT, WTL

Wednesday 28th September 2011

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The following stocks may be active on the New Zealand exchange after developments since the close of trading. All prices are in New Zealand dollars unless specified.

Themes of the day:

The risk-on trading on global equity markets is likely to flow through to the NZX today with no local data to distract from the macro themes.

Western share markets rallied overnight on signs European policymakers are bowing to pressure to increase the size of the European Financial Stability Fund.

On Wall Street, the Standard & Poor's 500 Index rose 2% to 1,186.65, Europe's Stoxx 600 surged 4.4% to 229.91, and the 19-commodity Thompson Reuters Jefferies CRB Index rose 2.7% to 311.41.

Fletcher Building Ltd. (FBU): The country's biggest construction firm is planning to build a major laminates plant in China to meet demand from the country's booming commercial construction sector. The 500,000 square-foot facility, which will be situated in Jiujiang and employ 400 people, is expected to be completed in 2013. FBU shares rose 2.4% yesterday to $7.57.

Goodman Fielder Ltd. (GFF): The food ingredient maker's shares are still in a trading halt while it launches plans to raise A$259 million via a discounted rights offer to strengthen its balance sheet. The five-for-12 pro rata renounceable entitlement offer at 45 Australian cents apiece comes after the company posted a full-year loss after taking a charge against its baking division. The shares last traded at 76 cents before the suspension.

NZF Group (NZF): Resimac NZ Home Loans, a unit of the Australian non-bank lender, has agreed to buy a majority stake in NZF Group’s securitisation operations to help recapitalise the ailing business. The deal, which is subject to shareholder approval, receipt of certain Inland Revenue Department tax rulings and finalising an agreement to protect NZF’s minority rights, will see Resimac take control of NZF's home lending unit. NZF shares were unchanged at 3.5 cents yesterday.

Pumpkin Patch Ltd. (PPL): The children’s clothing chain turned to a full-year net loss of $1.88 million from a profit of $25.5 million previously after taking charges to close U.S. stores and write-off unprofitable U.K. outlets. In addition the company announced the departure of founding managing director Maurice Prendergast. PPL shares fell 10.1% yesterday to 80 cents.

Vector Ltd. (VCT): Shares in the Auckland electricity and gas distributor rose 1.6 % yesterday to $2.48 after a judicial review of the Commerce Commission's process for determining regulated monopoly pricing gave the company an important win in the High Court in Wellington, opening the way for a review of the way the commission sets the so-called “input methodologies” which determine what Vector can charge for its services.

Windflow Technology Ltd. (WTL): The ailing twin-blade turbine manufacturer could stand in line to benefit from a $50,000 boost after a shareholder offered to top up the company's finances through a private placement. Wolfgang Rehfus holds 270,000 Windflow shares and the placement would see that grow to 400,000. WTL shares were unchanged at 50 cents yesterday on the NZAX.

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