Tuesday 11th November 2008
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Themes of the day: The New Zealand dollar fell to 57.80 US cents as a decline in US stocks spurred some investors to reverse carry trade positions. Stocks on Wall Street fell, with General Motors shedding more than a fifth of its value after Deutsche Bank cut the largest US automaker's equity value to zero, saying it may not be able to fund its business beyond the end of the year. Google dropped about 6% on concern revenue growth will stall.
Allied Farmers (ALF): The rural services and finance company today named Paul Macfie as chief executive, replacing David Bale. Macfie is currently a broker at McDouall Stuart, focusing on investment banking transactions with a rural emphasis and has previous worked for Williams & Kettle. The stock traded at $1.10 yesterday and has dropped about 34% this year.
Australia & New Zealand Banking Group (ANZ) and Westpac (WBC): The Australian banks may gain on the NZX after National Australia Bank yesterday increased the size of a share sale by 50% to A$3 billion because of demand. ANZ Bank rose 0.6% to $19.35 on the NZX yesterday and Westpac rose 3.7% to $25.
Contact Energy (CEN): The Dominion Post reported that the incoming government could combine state-owned power companies Mighty River Power, Genesis Energy and Meridian and partially privatise them to improve efficiency and open up new investments. Energy consultant Bryan Leyland said privately-owned power firms would likely object to the proposal. Contact's shares are trading at $7.41 after falling from $7.55 earlier this month.
Dorchester Pacific (DPC): Perpetual Trust said the ailing finance company's deferred repayment plan "has merit" and can be put to debenture holders for a vote. Approval would see investors being repaid all of their principal over three years through a managed wind down of the Company's loan books. Under the plan, the company will take a $10 million writedown of property loan receivables. Dorchester last traded at 15 cents on October 29 and has dropped 85% this year.
Fisher & Paykel Healthcare (FPH): The company, which reports earnings on November 20, said in October its profit would be lifted by the weakening New Zealand dollar because some 85% of revenue is in US dollars. The stock is rated a "buy" by five of eight analysts who follow the company. The stock rose 3% to $3.08 yesterday and has gained 15% in the past six months.
Fletcher Building (FBU): Australian figures yesterday showed home-loan approvals fell for an eighth month in September, indicating the housing market is continuing to weaken. The shares rose 1.4% to $5.76 yesterday and are down 50% this year.
Pike River Coal (PRC): Rio Tinto, the world's second-largest iron ore exporter, yesterday said it would cut Australian production by 10% because of waning demand from Chinese steelmakers. Steelmakers rely on coking coal, which Pike is preparing to extract, to fire their mills. The coal miner fell 1.7% to $1.13 yesterday and is little changed this year, while the NZX 50 is down 30%.
Wool Equities (WEL): The Supreme Court has granted Saxmere Co. leave to appeal a Court of Appeal ruling in favour of Disestablishment Co. after the former Wool Board failed to recognise Saxon as a wool type during its dissolution. If the appeal is successful, the dispute will be reheard in the Court of Appeal, which previously dismissed Saxon's claims. Wool Equities share price has dropped over 65% this year, and is currently at 26 cents.
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