Stocks to watch: Air NZ, Allied Farmers FPA

Monday 4th October 2010

Air NZ has had its credit rating lifted by Moody's, former Hanover investors have launched a bid to appoint two independent directors to the board of Allied Farmers, while Fisher & Paykel Appliances has sold the majority of its Cleveland site in Australia.

Air New Zealand (AIR): The national carrier had its credit rating lifted to an investment grade Baa3 by Moody's Investors Service, which cited the support of its government majority owner. The upgrade also reflected its good performance through the recession. The shares rose 0.8% on Friday to $1.28.

Allied Farmers (ALF): A group of former Hanover debenture holders has launched a bid to appoint two independent directors to the board of the embattled finance company, according to press reports. The shareholders also want the Securities Commission to step up its investigation of last year's Allied and Hanover merger. Last week Allied's auditors gave only a qualified sign-off on the company's annual accounts, saying it doesn't have enough evidence that the company can continue as a going concern. Shares fell 7.4% on Friday to 2.5 cents.

Fisher & Paykel Appliances Holdings (FPA): The whiteware manufacturer today announced that it has sold the majority of its Cleveland site in Australia for $21.5 million, and will lease back a portion of the warehouse and office facilities. The sale and leaseback arrangement comes after the company moved its refrigerator factor to Australia to Thailand as part of its global manufacturing strategy. Shares rose 1.3% on Friday to $1.58.

Goodman Fielder (GFF): The Australasian food maker said on Friday that its New Zealand unit is planning to sell up to $250 million of bonds and is seeking preliminary indications of interest from existing investors. The shares fell 0.6% to $1.80 on Friday.

Hallenstein Glasson Holdings (HLG): The clothing retailer is rated as a ‘hold' after gross margin improvements helped the company deliver a 60% rise in adjusted net profit to $20.4 million for the year to August 1, according to Goldman Sachs JB Were analyst Buffy Gill, quoted on the ShareChat website. Gill increased her 2011 to 2013 earnings forecasts by between 20% and 30% as a result of the significant margin improvement, and provides an attractive 8% yield backed by solid operating cash flow. Shares fell 1.2% on Friday to $4.24.

Lyttelton Port (LPC): The South Island's biggest port last week said it has abandoned long merger talks with Port Otago because it needs to focus on repairing earthquake damage. The shares were unchanged at $2.49 on Friday.

NZX (NZX): New Zealand's securities market operator is set to launch its dairy derivatives market today, with a global whole milk powder futures contract called NZX Dairy Futures as its first product. NZX has labeled the contract as a "vital tool to manage price risk in the most heavily trade milk powder product in the world". Shares rose 1.9% on Friday to $1.60.

Tower (TWR): The general insurer on Friday announced that it made a $118 million offer for Fidelity Life, lifting its share of New Zealand's life insurance market. Tower has offered $82 a share for Fidelity, made up of $55 cash and $27 of Tower shares. Its own shares rose 2.2% to $1.87.

Themes of the day: All eyes are on the US market this week as the third quarter earnings season starts and release of latest jobs report on Friday. Consensus forecasts for jobs flat, with unemployment rising from 9.6% to 9.7%. The New Zealand dollar rose to a 10 month high against the US currency over the weekend, as the greenback continued to weaken on signs that the Federal Reserve will be forced to implement further round of quantitative easing to bolster the ailing American economy. The kiwi rose 1% to 74.40 US cents from 73.67 on Friday.

Businesswire.co.nz

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