Stocks to watch: Air NZ, Pike River, Contact Energy, HLG, NZR,

Tuesday 6th April 2010

Air New Zealand corrects a report that stated Fyfe is planning to leave in the next 18 months and Pike River Coal's first export shipment coincides with rising coal prices. Local investors prepare for the New Zealand Institute of Economic Research’s Quarterly Survey of Business Opinion this morning.

Air New Zealand (NZX: AIR ): The national carrier corrected a media report that CEO Rob Fyfe planned to leave in the next 18 months. “The market is more positive to the news that he’s staying,” said Stephen Wright, private adviser at ASB Securities. “He’s got a good reputation but then so has his senior management team.” Its shares rose four cents on Thursday to close at $1.31.

Pike River Coal (NZX: PRC ): The high quality coal miner’s first export shipment coincides with a “buoyant and encouraging international market in which world coking coal prices are expected to rise higher than previously forecast,” said chief executive Gordon Ward. A recent BHP Billiton announcement that it has agreed to a US$200/tonne hard coking coal price with its Japanese customers is good news he said. “Pike River is well-placed to benefit from the current international demand,” he said. Its shares rose two cents on Thursday to close at $0.94.

Contact Energy (NZX: CEN ): The electricity generator, and benchmark stock for the NZX ended the first quarter priced pretty much where it begun said ASB Securities private client adviser Stephen Wright. The second quarter may not offer much more in terms of widespread gains, “all year the market is just going to consolidate,” he said. “There will be more stock picking rather than better on the whole market.” Contact’s shares rose seven cents on Thursday to close at $6.47.

Hallenstein Glasson Holdings (NZX: HLG ): The clothing retailer produced a solid first half year net profit of $8.5 million. The company’s net profit margins were up 9.7% compared with 7.9% in the previous first half, and the New Zealand sales momentum improved said Goldman Sachs JB Were analyst Buffy Gill in ShareChat. Australian net profit was positive for the first time in two and a half years, and operating costs fell. “Management is rolling out a brand update for Glassons, which should enhance the brand’s perception and positioning in New Zealand, timely given Topshop’s recent announcement to open its first store in New Zealand in Takapuna,” she said. She has the shares on hold; its price lifted five cents on Thursday to $3.46.

New Zealand Refining Company (NZX: NZR ): The Northland-based oil refinery’s dramatic improvement in profit margins in the first two months of 2010 is more likely to be a “dead-cat-bounce” than the first sign of a prolonged recovery broker McDouall Stuart said in ShareChat. The company itself expects further price volatility and regarding the recent improvement as the start of a sustained recovery would be premature. “The twin threats of increased refining supply in Asia and reduced demand still loom heavily over the industry, and we expect margins to decline and oscillate somewhere between the recent January/February high of US$6.85 a barrel and the November/December low of US$1.18 a barrel,” McDouall Stuart said. Its shares dropped a cent on Thursday to $3.98.

Economic themes of the day: The New Zealand dollar dropped 0.5% against the greenback after strong American manufacturing and employment data underpinned a resurgence in US interest rate markets and propped up the greenback.

The kiwi sank to 70.26 US cents. Increasing signs that the world’s biggest economy is shifting gears buoyed Wall Street investors yesterday, as European markets remained closed over Easter.

The Dow Jones Industrial Average gained 0.36%, Standard & Poor’s 500 lifted 0.67% and the NASDAQ composite rose 0.95%.

The Institute for Supply Management said its service index grew in March for the third straight month, its leap to 55.4 the strongest reading since May 2006. A reading above 50 indicates expansion in the sector.

Businesswire.co.nz

Comments from our readers

No comments yet