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Stocks to watch: AMP, Infratil, Pike River

Tuesday 16th November 2010

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AMP shares surge on news of its joint bid for Axa Asia Pacific, Infratil posts a $43 million first half profit and Pike River Coal's new chief executive Peter Whittall said the company will be more cautious about production forecasts in future.

AMP (AMP): The NZX-listed shares of the Australian wealth manager surged 5.2% to $7.15 when they resumed trading yesterday after being halted for the announcement of its A$13.3 billion takeover offer for AXA Asia Pacific. AMP is teaming with France's AXA SA, the biggest shareholder of AXA Asia Pacific, in the transaction. Minority holders of the target company would get at least A$6.43 a share, made up of 0.73 AMP stock and the balance in cash.  

Guinness Peat Group (GPG): The investment company said the Coats thread-making company, its biggest investment, had benefited from stronger demand in the second half of the year. Its crafts market "has remained challenging," maintaining sales at 2009 levels, the company said. Raw material prices peaked in the September quarter, "putting pressure on gross margins." The shares rose 1.4% to 74 cents yesterday. 

Infratil (IFT): The investment company posted a first-half profit of $43 million, up from $14 million a year earlier, driven by increased earnings from Infratil Energy Australia and an equity accounted contribution from Greenstone Energy. The shares rose 2 cents to $1.90 yesterday. 

OceanaGold (OGC): The owner of the Macraes gold field said its 2010 guidance if for production of 270,000 to 290,000 ounces of gold at between US$555 and US$585 an ounce. The company released industry data showing that market capitalisation against reserves shows OceanaGold’s ratio is low compared to sector peers. The stock fell 10 cents to $4.63 yesterday. 

Pike River Coal (PRC): New chief executive Peter Whittall told shareholders at their annual meeting yesterday that the company will be more cautious about forecasts after production delays forced it to raise more capital to keep going until it makes coal sales. The coal miner was forced to cut its production forecast by almost half to 340,000-to-360,000 tonnes due to delays at its hydro mining operations. The shares rose 1.1% yesterday to 96 cents. 

Pyne Gould (PGC): The financial services company said yesterday it plans to distribute most of its stake in the proposed South Island bank if the merger proceeds. The remaining holding will be separately placed to investors about the same time as the distribution to raise cash for Pyne Gould. The shares rose 2.4% yesterday to 42 cents. 

Themes of the day: Stocks on Wall Street rose yesterday amid merger and acquisition activity and a pick-up incommodity prices. Caterpillar agreed to buy mining equipment maker Bucyrus International and EMC bought Isilon Systems for US$2.25 billion. Infratil reported a surge in first-half profit on earnings from its Australian energy investments and contribution from Greenstone, the business that acquired the Shell NZ assets.

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