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Stocks to watch: Air NZ, Ecoya, HLG

Tuesday 28th September 2010

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Air NZ and Virgin Blue want individual meetings with the Australian competition watchdog in a bid to persuade it to approve the airlines' partnership, while Air NZ's chief Rob Fyfe extends shares in Ecoya as part of the underwritten share placement. Hallenstein Glasson shares rose yesterday after posting a jump in profit.

Air New Zealand (AIA): The national carrier and Virgin Blue want to meet individually with the Australian competition watchdog to try to persuade it to overturn a draft decision to reject their alliance, according to press reports. Chief executive Rob Fyfe told shareholders at their annual meeting late last week the national carrier risks having to close down routes if the alliance is turned down. Shares rose 1.5% yesterday to $1.32. 

Ecoya (ECO): Air New Zealand chief executive Rob Fyfe has continued to extend his family investments in the candle and skin cream group as part of the underwritten share placement. The shares traded unchanged yesterday at 79 cents. 

Hallenstein Glasson Holdings (HLG): The clothing retailer yesterday posted a 53% jump in full-year profit with improved product offerings and a stronger kiwi dollar helping to increase margins. The shares rose 2.9% to $4.42. 

Kathmandu Holdings (KMD): The outdoor equipment retailer rose 2.3% yesterday to $1.82, its highest close since August 3. The company on Friday announced a final dividend of 7 cents a share, up from the prospectus forecast of 6.7 cents. Chief executive Peter Halkett said while retailing remains challenging, Kathmandu is "well placed to continue our growth".

NZ Farming Systems Uruguay (NZS): The South American dairy farm operator is now a subsidiary of Olam International Ltd, after the Singaporean company mopped up almost 78% of the company in a successful takeover offer to shareholders. The commodities company, which itself is now in merger discussions with rival Louis Dreyfus Commodities, made an initial mid-July pitch to NZFSU shareholders at 55 cents a share, an offer that was lifted three weeks later to 70 cents a share. Shares were unchanged yesterday at 69 cents.

Turners & Growers (TUR): The fruit and vegetable company is rated a ‘hold' by Forsyth Barr analyst John Cairns, according to ShareChat. The company is moving to control its own supply of produce, enabling it to leverage its supply chain. Still, Turners may only provide a 4.3% return on equity this calendar year. Its 66% shareholder Guinness Peat Group is currently reviewing its strategy and a sale of Turners is a possible outcome. The stock was unchanged at $2.40 yesterday.

Themes of the day: Mergers and acquisitions dominated activity on Wall Street, with almost US$10 billion of deals announced. The Standard & Poor's 500 Index is heading for a monthly rally of more than 9%, one of only a handful of months in the past two decades to achieve a gain of that magnitude. Equity markets in Europe weakened. The New Zealand dollar is poised for its first quarterly gain in a year. The kiwi gained 7.6% so far this quarter and 5.5% this month, while the Australian dollar is at the highest level since July 2008, with investors talking of parity with the US dollar.

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