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Stocks to watch: Contact, Nuplex, Port of Tauranga

Wednesday 24th March 2010

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Contact's proposal for geothermal power at its Tauhara plant is the first to be referred to an independent board of enquiry, Nuplex buys the ingredients business of Med-Chem and Port of Taouranga says its acquisition of Tapper Transport will improve supply chain links.

Contact Energy (CEN): Environment Minister Nick Smith yesterday announced that the company’s 240MW Tauhara 2 geothermal generation proposal has become the first to have a power station proposal referred to an independent board of inquiry under the fledgling Environmental Protection Authority. The new rules ensure a speedy hearing for the consent, with reduced rights of appeal from other parties for projects of national significance. The shares fell 0.2% to $6.10 yesterday. 

Nuplex Industries (NPX): The specialty chemicals manufacturer today said it agreed to buy the ingredients business of Med-Chem group, saying the purchase will lift earnings for its Specialties unit in the next 12 months. It didn’t disclose the purchase price. The shares rose 1 cent to $3.32 yesterday. 

Port of Tauranga (POT): The port’s $15 million acquisition of Auckland-based Tapper Transport will improve its supply chain links and its ability to grow container movements at Ports of Auckland's expense, said Craigs Investment Partners analyst Geoff Zame, according to the ShareChat website. The acquisition is part of Port of Tauranga's building-blocks approach to develop a more complete supply-chain for its inland Metroport, to compete for import volumes that are currently going through Ports of Auckland. The shares fell 3 cents to $6.97 yesterday. 

Sealegs Corp. (SLG): The designer and manufacturer of amphibious boats said it will move to a larger factory at the end of the month. The new facility will combine hull fabrication, assembly, service, development, sales and marketing into one building “which will result in savings and productivity benefits, said chief executive David McKee Wright. The company has rolled out new models including a concept cabin boat and an all-wheel drive option. The shares surged 17% to 17.5 cents yesterday. 

Telecom Corp. (TEL): The phone company’s XT network crashed again yesterday, disrupting customers’ phone calls, text messaging and data use. The shares are trading near their lowest levels since the early 1990s. “It’s difficult to see it as being a compelling investment at the moment,” despite the low values, said Craig Brown, who helps manage $3.3 billion at ING New Zealand. “I think investors are holding off getting comfort before they invest.” The shares remained unchanged at $2.14 yesterday.  

Warehouse Group (WHS): The discount retailer announced the bookbuild for its 5-year bond being two-times oversubscribed, removing the need for a public pool. The $100 million bond will have a minimum interest rate of 7.3% per annum. The funds are planned to help the company expand its product range and open new stores. The shares climbed 1.3% to $3.98 yesterday. 

Widespread Portfolios (WID): The company managed by Chris Castle yesterday announced a share purchase plan to raise about $960,000 at 15 cents apiece to help fund its share of study of exploration data on the Chatham Rise prior to developing a feasibility study for mining phosphates from the sea floor. The funds will also top up the company’s interest in affiliate and Chatham Rise partner Widespread Energy (WEN), which is currently 22% and is being diluted by WEN’s own capital arising. WID fell 5.3% to 18 cents yesterday and WEN was unchanged at 12 cents. 

Themes of the day: Statistics New Zealand will release data for the current account, which is expected to show the deficit shrank in the fourth quarter, while figures tomorrow are forecast to show the economy accelerated in the final three months of 2009. Stocks rose on Wall Street and in Europe after US figures showed sales of existing homes fell less than expected in February. The European Union continued to haggle over support for Greece, with German Chancellor Angela Merkel saying Europe's largest economy would only agree to financial aid as a last resort, and when done in tandem with the International Monetary Fund.

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