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Stocks to watch: Allied Farmers, Argosy, Telstra

Tuesday 30th November 2010

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The SFO has confirmed it is investigating Hanover Finance, Argosy reports a $93 million first-half loss and Telstra is accused by the IRD of dragging its feet on 10 tax avoidance cases in the High Court.

Allied Farmers (ALF): The Serious Fraud Office announced that it had launched an active investigation into Hanover Finance, the finance company which sold its loan book to Allied Farmers in a debt-for equity swap last year, after preliminary enquiries found reasonable grounds to "believe that fraud had been committed". Allied shares rose 9.5% yesterday to 2.3 cents.

Argosy Property Trust (ARG): The listed property investor posted a $93 million first-half net loss, although that reflected a $103.2 million non-cash charge for government tax changes. Net distributable income fell 16.3% to $17.5 million as net property income fell 13% to $35.6 million for the six months ended September 30, reflecting asset sales during the last year. Earnings before interest and tax fell 8.7% to $31.4 million. Share fell 2.6% yesterday to 76 cents.

Auckland International Airport (AIA): New Zealand's busiest gateway reported a 3% increase in total international passenger numbers in October to 661,384 from the same month a year earlier. That’s up 2.7% on a rolling 12-month basis. Domestic passenger numbers grew 2.9% in the month, and are up an annual 7.2%. Shares rose 1% to $2.09.

Renaissance (RNS): The New Zealand distributor of Apple products and education software yesterday posted a pretax profit of $466,000 in the nine months ended September 30, up from a loss of $1.1 million a year earlier. Sales rose 10% to $154 million. Shares fell 3.1% yesterday to 31 cents.

Ryman Healthcare (RYM): The retirement village operator will continue to see robust demand as New Zealand's population demographic continues to age, according to Goldman Sachs & Partners analyst Matt Henry, quoted on the ShareChat website. Ryman reported a 36% rise in reported net profit to $52.3 million for the six months ended September 30 with realised profit up 25% to a record $36.1 million. Shares rose 0.5% yesterday to $2.19.

Telstra (TLS): The Inland Revenue Department accused the Australian telephone company's New Zealand division of intentionally delaying the progress of 10 tax avoidance cases in the High Court. Shares fell 1.9% yesterday to $3.62.

Turners & Growers (TUR): The World Trade Organisation ruled that Australia's 90-year-old ban on New Zealand apples is unscientific and breaks international rules, and ends an exhaustive 14-year battle to get restrictions lifted. Shares in the fruit marketer and distributor rose 2.9% yesterday to $1.42.

Themes of the day: Global markets retreated further as European sovereign debt concerns shifted from Ireland to Portugal and Spain. In afternoon trade the Standard & Poor's 500 Index fell 0.1% to 1,189.26, while in Europe the Stoxx 600 fell 1.8% to 262.16 at the close. The concerns spilled over into the European currency, with the euro falling 1.1% against the US dollar to US$1.31, a two-month low. Risk aversion saw the New Zealand dollar fall to 74.48 U.S. cents, from 74.94 yesterday. Government is set to release data on the number of building consents issued in October, which will include Canterbury's first post-earthquake numbers.

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