Stocks to watch: A2 Corp., Allied Farmers, Nuplex

Thursday 2nd July 2009

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

Themes of the day: Shares rose on Wall Street after manufacturing data stoked optimism the recession may be abating. Milk powder prices extended their slide, falling 3% in Fonterra Cooperative Group’s latest online auction. The New Zealand dollar slipped below 64 US cents.

A2 Corp. (ATM): The government decided not to convene an experts panel to consider whether to probe the health benefits of A2 milk, with Food Safety Minister Kate Wilkinson saying a European Food Safety Authority review had concluded normal milk doesn’t pose unacceptable health risks. The previous Labour administration had approved a plan to convene an experts panel. Supporters of A2 milk claim a protein found in A1 milk showed a link to a range of ailments including diabetes and heart disease. The shares fell 1 cent to 12 cents yesterday.

Allied Farmers (ALF): The company yesterday said recent trading has been significantly behind expectations, because of reduced spending by rural customers and the impact on commissions from a drop in dairy cow prices. Allied now expects difficult trading conditions in the rural business in the early part of the 2010 financial year, it said. The shares were unchanged at 35 cents yesterday and have dropped almost 55% this year.

Genesis Research and Development Corp. (GEN): The Auckland-based biotechnology company soared 58% to 15 cents yesterday after announcing it would tap an international venture capital group to partner on a new subsidiary to undertake its gene silencing project. The company yesterday told shareholders it had an “urgent” need for cash with funds on hand currently standing at $300,000. Genesis said it will offer a share purchase plan to raise funds while it attempts to sell some assets and recoup debt.

Hellaby Holdings (HBY): The group with interests ranging from footwear stores to automotive parts soared 25% to $1.40 yesterday after announcing a 36% reduction in core debt and the conclusion of a refinancing agreement with Westpac Banking Corp. through until July 2011.

Metlifecare (MET): The retirement village operator named Alan Edwards as chief executive replacing Richard de Haast, who leaves at the end of July. Edwards is a veteran of the retirement village industry and has managed two other such companies, Metlifecare said. Its shares last traded on June 24 at $1.80.

NZ Farming Systems Uruguay (NZS): The average price of milk powder dropped to US$1,829 per metric ton in Fonterra’s latest auction on the globalDairyTrade website, from US$1,886 last month. Shares of NZ Farming Systems, which develops dairy farms in South America using intensive New Zealand farming techniques, rose 3 cents to 48 cents yesterday. PGG Wrightson, the nation’s biggest rural services company, dropped 6 cents to $1.07.

Nuplex Industries (NPX): The specialty chemicals maker is rated a ‘buy’ by brokerage McDouall Stuart, which said there is evidence destocking by customers is reversing, according to the ShareChat website. The company’s $159.5 million capital raising via a rights issue and placement in April “should alleviate the financial risk of the company and allow management to pursue operational improvements in a difficult global economic environment," the brokerage said. The shares were unchanged at $1.50 yesterday.

Businesswire.co.nz

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