Stocks to watch: Rakon, Allied Work Force, ING,Warehouse, NZR, Goodman Property

Thursday 20th May 2010

Allied Work Force shares soar 18% as employment growth returns. NZ Refining says processing margins still 'healthy' and it has been reported that Woolworths might be interested in pursuing a takeover of The Warehouse.

Allied Work Force (NZX: AWF ): The labour pool company said a pick-up in the second half of the financial year to March 31 resulted in a profit of $2 million, almost matching last year's $2.1 million. The shares soared 18% to 80 cents yesterday.

New Zealand Refining Co. (NZX: NZR ): The nation’s only oil refinery said yesterday that its gross refinery margin fell to US$5.55 per barrel gross refining margin for March and April from US$6.85 in January/February and US$6.34 in March and April last year. Production through May will be reduced and margins affected by a maintenance shutdown. The shares fell 3.2% yesterday to $3.32.

Rakon (NZX: RAK ): After a tough first half, with some signs of recovery, the New Zealand-based global manufacturer of crystal oscillators used in navigation systems and mobile phones reports its results for the 12 months to March 31 later today. Rakon shares traded unchanged yesterday at 99 cents.

Sanford (NZX: SAN ): The fishing company that exports most of its catch, led gainers on the NZX 50 Index yesterday, rising 2.3% to $4.45 as the kiwi dollar extended its slide to hold below 69 US cents, lifting the value of overseas sales. The currency subsequently dropped below 68 cents.

Warehouse Group (NZX: WHS ): Woolworths was reported in the Sydney Morning Herald to still be interested in pursuing a takeover of the biggest retailer on the NZX. Shares of Warehouse gained 1.4% to $3.54 yesterday.

ING Property Trust (NZX: ING ): The Auckland-based property investor said yesterday that a write down on the value of its portfolio put it into a covenant breach over its Manawatu Business Park joint venture. The trust posted a full-year loss of $53.7 million, down from a year-earlier $63.1 million. The shares declined 2.6% to 74 cents yesterday.

Goodman Property Trust (GMT): The property investor is rated a ‘buy' by Forsyth Barr analyst Jeremy Simpson, according to the ShareChat website. Goodman is "well-positioned to capitalise on any recovery," Simpson said. He trimmed his forecast for 2011 distributable profit to 8.6 cents a unit, the low end of the trust's 8.6-to-8.8 cents guidance. A key question for today's Budget will be whether commercial and residential property investments are both covered by likely new restrictions on depreciation and other tax deductibility. The shares fell 1 cent to 95 cents.

Economic themes of the day: The New Zealand dollar has fallen sharply to US67.58 cents, and was as low as US67c overnight, as global investors continued their flight to traditionally safe havens following the German authorities' ban on short-selling.

The fall comes as all eyes in New Zealand will be on the government's second Budget, to be delivered in Parliament at 2pm. A broadly fiscally neutral tax package is expected to raise GST to 15%, lower personal tax rates and clamp down on a variety of trust and residential property investment practices that are allowing some high income earners to avoid tax.

The Budget's importance for economic strategy is thrown into sharp relief also by the overnight release of the latest IMD World Competitiveness Index, which shows New Zealand slipped five places from last year to rank 20^th of 54 developed and emerging countries ranked by the Swiss business school.

Businesswire.co.nz

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