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Stocks to watch: Air NZ, Allied Farmers, AMP NZ Office

Thursday 21st October 2010

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Air NZ's alliance with Virgin Blue looks a step closer to becoming a reality, Allied Farmers has repaid its term loan facility with Westpac, while ACC has called for AMP NZ Office's managers to be sacked.

Air New Zealand (AIR): The trans-Tasman alliance between the national carrier and Virgin Blue looks a step closer to becoming reality after Auckland and Wellington airports dropped their objections to the deal. Earlier this week the airline s tabled a revised offer aimed at overturning antitrust objections to their code sharing arrangement, which would see Virgin and Air NZ increase the number of flights and boost capacity on key route across the Tasman. Shares fell 3% yesterday to $1.31.

Allied Farmers (ALF): The embattled financier announced today that it repaid its term loan facility with Westpac New Zealand in full. The loan stood at $16,500,000 as of June 30. In addition, the company announced it had reached an agreement with Allied Nationwide Finance, which is currently in receivership, around its existing debtor factoring, credit enhancement and related party loan arrangements. Under the agreement Allied Farmers will convert these existing arrangements into secured loan facilities with Allied Nationwide Finance. Shares were unchanged yesterday at 0.15 cents.

AMP NZ Office Trust (APT): New Zealand’s Accident Compensation Corp. called for the managers of AMP NZ Office Trust to be dumped, claiming AMP Haumi has destroyed investor value in the trust. ACC, which holds an 8.9% stake in the trust, said it would call for a special meeting for unit holders to appeal to the company trustee to have the manager removed under the Unit Trusts Act. Shares were unchanged yesterday at 77 cents.

DNZ Property Fund (DNZ): New Zealand’s fifth largest listed property entity is rated as a “buy” by Goldman Sachs JB Were analyst Buffy Gill, quoted on the ShareChat website. DNZ owns a diversified portfolio with 52 medium-sized assets of average "B-grade" quality, long weighted average lease terms with high occupancy rates, a strong customer base, and a track record of rental growth, she said. The company also has opportunities within its portfolio including developing remaining land and its active management team appears to have a solid understanding of the portfolio and tenants, Gill said. Shares fell 0.8% yesterday to $1.17.

New Zealand Oil & Gas (NZO): The energy exploration and production company has been advised by the Tui Operator, AWE, that the production from the Pateke-3H well has been delayed again due to technical issues. Shares fell 0.8% yesterday.

Restaurant Brands NZ (RBD): The fast food franchise operator posted a 52% rise in its first-half profits yesterday. The company kept its full-year guidance at between $24 million and $26 million, with consumer sentiment still uncertain. Shares rose 2.4% yesterday to $2.58, and have gained 50% so far this year.

Sanford (SAN): The fisheries company said yesterday it expects net profit to beat analysts’ forecasts as it benefits from better fish prices and its allocation of Emissions Trading Scheme units. The company said net profit will be about $25 million in the year ended Sept. 30 with “steadily improving prices for many species” taking the edge off a strong kiwi dollar, while its allocation of emission trading units will bolster the bottom line by $3.34 million. Shares rose 6.8% yesterday to $4.40.

Themes of the day: Shares on Wall Street rebounded on better-than-expected results from companies including Boeing and Yahoo! and renewed expectations the Federal Reserve will print more money to stimulate growth. The Standard & Poor's 500 Index rose 1.1% to 1,178.17 in late after trade, and the Stoxx Europe 600 Index ended the session 0.3% higher at 266.13 after seesawing for most of the day. The New Zealand dollar clawed back yesterday's losses, and climbed to 75.44 US cents from 74.66 cents yesterday. Government is set to release September's international travel and migration figures today, while the ANZ Consumer Confidence survey is also due for release.

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