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Stocks to watch: New Zealand equity preview

Tuesday 9th September 2008

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The following stocks may be active on the New Zealand exchange after developments since the close of trading yesterday.

Themes of the day: US stocks rallied on optimism the government's takeover of Fannie Mae and Freddie Mac will help bring stability to the financial system. The Standard & Poor's 500 Index 2.1 percent to 1,267.79. The `nationalization' also helped lift the US dollar, which gained to as much as $1.4054 per euro, the highest since October. New Zealand's dollar traded recently at 67.20 US cents.

A2 Corp. (ATM): The company that owns and licenses techniques to identify milk with a protein variant claimed to have health benefits raise NZ$3.3 million through the placement of 33 million new shares at 10 cents apiece to New Zealand institutions. The capital raising follows a rights issue that raised $11.3 million. The stock was unchanged at 11 cents yesterday on the NZAX market and has dropped 50% this year.

Auckland International Airport (AIA): New Zealand's busiest gateway today named Peter Alexander as general manager property, with oversight of 40 commercial properties worth more than $500 million. Alexander is currently acquisitions manager at Goodman Group and was previously at AMP Capital Investors. The airport's stock rose 2 cents to NZ$2.04 yesterday and has gained 3.5% in the past month.

Burger Fuel Worldwide (BFW): The burger chain is trading at less than half its IPO price and fell 1 cent to 45 cents yesterday. The fast-food company opened another outlet in Wellington yesterday, bringing its total franchised stores to 25.

Contact Energy (CEN): The UK's BG Group Plc may drop its hostile bid for Contact's parent, Origin Energy, after the utility struck a deal to jointly develop coal-seam gas into LNG with ConocoPhillips. BG Group has said it would sell the half stake in Contact if its bid was successful. Contact stock jumped 4% to NZ$8.71 yesterday, a three-month high.

PGG Wrightson (PGW): The rural services company, which yesterday won support of Silver Fern Farm's farmers to buy 50% of the co-operative for NZ$220 million, said it plans to raise NZ$100 million in equity funds. The stock fell 6.3% to NZ$2.55 yesterday, trimming its gain this year to 15%.

Propertyfinance group (PFG): The suspension of trading in the stock was lifted today after the company released its annual report. The stock was suspended on August 8 because the company didn't meet the filing deadline. The stock had fallen 65% in the 12 months up until its suspension and last traded at 10 cents.

Telecom Corp. (TEL): The stock was unchanged at NZ$3.15 yesterday, near a 15-year low, after Communications Minister David Cunliffe reopened the door to an investigation and potential price regulation of national mobile telephone roaming. At that price, Telecom has a dividend yield of 13.7%. That's more than twice the yield of the second-largest stock on the NZX 50 Index, Contact Energy Ltd., which has a dividend yield of 4.8%.

Wellington Drive Technologies (WDT): The company today said Vendo de Mexico, part of Mexico's Femsa group, ordered 400,000 commercial refrigeration 'ECR' motors. The sale was first announced last month. The motors will go into vending machines and save an estimated US$90 million over their service life, the company said. The stock was unchanged yesterday at 31 cents and has declined 37% this year.

By Jonathan Underhill

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