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Stocks to watch: Delegat's, Farming Systems, NZO, RBD, TEL

Wednesday 28th April 2010

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Delegat's shares react to the Law Commission's recommendations on increasing the excise tax on alcohol, Fonterra's forecast milk prices for 2009/10 brings good news for NZ Farming Systems Uruguay, while NZOG shares take a dive after crude oil fell on Greece's 'junk' credit rating.

Delegat’s Group (DGL): The wine industry has welcomed comments from Prime Minister John Key that the government is unlikely to increase the excise tax on alcohol as recommended by the Law Commission. Its report suggests a 50% increase in excise tax would drive up prices of liquor and help reduce problem drinking. The shares fell 8 cents to $1.72 yesterday.

NZ Farming Systems Uruguay (NZS): The shares rose 5.1% to 41 cents yesterday, the biggest gain on the NZX 50, after Fonterra Cooperative Group, the world’s biggest dairy exporter, raised its forecast milk price for 2009/10 by 7% to $6.10 a kilogram of milk solids in the year ending May 31, citing rising global dairy prices as demand begins to outstrip supply.

New Zealand Oil & Gas (NZO): Crude oil fell to a week low after Greece’s credit rating was cut to junk by Standard & Poor’s, driving down equity markets and stoking the US dollar. New York crude tumbled 2.1% to US$82.44 a barrel on the New York Mercantile Exchange. The shares fell 1 cent to $1.55 yesterday.

NZ Windfarms (NWF): The Manawatu windfarm operator said yesterday that revenue jumped to $1.5 million in the January-March quarter from just $194,000 a year earlier. The shares jumped 8.7% to 25 cents yesterday.

Restaurant Brands (RBD): The fast-food company is rated ‘outperform’ by First NZ Capital analyst Sarndra Urlich, according to the ShareChat website. She raised her full-year profit forecast to $23.8 million from $22.1 million, compared with the company’s last forecast of slightly in excess of $20 million. Restaurant Brands will benefit from its overhaul of KFC outlets, its most profitable, and improved margin on chicken. The shares were unchanged yesterday at $2.31.

Telecom Corp. (TEL): The nation’s biggest phone company may face increased risk of regulation after Communications Minister Steven Joyce directed the Commerce Commission to reconsider its ruling that a voluntary agreement for mobile terminations in light of new price plans being offered. The stock slipped 0.5% to $2.19 yesterday. 

Themes of the day: Shares tumbled in Europe and the US after Standard & Poor’s cut Greece’s credit rating to junk level and lowered Portugal’s rating, sending the greenback higher as investors eschewed riskier assets. The Standard & Poor’s 500 declined 2.3% and France’s CAC 40 fell 3.8%. Investors are awaiting inflation figures from Australia today, with a pace of 0.8% forecast for the first quarter, which will help determine the timing of further interest rate increases in New Zealand’s biggest export market. The New Zealand dollar tumbled about 1 US cent to 71.07 US cents.

 

Businesswire.co.nz



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