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Stocks to watch: New Zealand equity preview

Thursday 2nd October 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: Crude oil for November delivery fell 2.1% to US$98.53 a barrel on the New York Mercantile Exchange. Stocks on Wall Street slipped after a report showed US manufacturing activity fell to the lowest level since the 2001 recession. The US Congress is voting today on the salvaged US$700 billion rescue package, with the House of Representatives set to vote Friday in the US.

Allied Farmers (ALF): The company said in its annual report that the proposed purchase of Speirs Finance will boost the asset base of its Allied Nationwide unit to
to $400 million and give it access to a $250 million securitisation programme run through the Bank of New Zealand. Despite an economy that has fallen into recession, the company is "planning to make a profit, reduce debt and continue to reward shareholders, Chairman John Loughlin said in the annual report. The stock fell 4 cents to NZ$1.20 yesterday and has declined 27% this year.

ING Medical Properties Trust (IMP): The property investor said because its tenants were typically medical businesses they are "largely insulated from mainstream financial and economic issues." The trust's portfolio is in "a sound position in the current economic climate and with a number of tenants currently considering expansion, the potential for near term growth is evident," according to the company's annual report. The trust's units rose 4.7% to NZ$1.12 yesterday and have fallen 8% this year.

ING Property Trust (ING): The trust today released results of an independent review of its property portfolio, which showed the value fell by 1.3%. The trust kept its forecast dividend at 8.7 cents per unit for the current year. The modest declined reflects "reflects the strong defensive characteristics" of the Trust's high quality property portfolio, said Michael Smith, chairman of the trust's manager. The units traded at 70 cents yesterday and are down 34% this year.

PGG Wrightson (PGW): The rural services company said its failure to secure financing to settle the acquisition of a half-stake in Silver Fern Farms meant it had to cancel last week's share sale to institutions that was to have raised NZ$78 million. The company would have to undertake another book-build if it wished to attempt a similar sale. The shares soared 18% to NZ$1.89 yesterday after having tumbled more than 40% in the past month.

Windflow Technology (WTL): The manufacturer yesterday said it got a further order from the Te Rere Hau Joint Venture for 32 turbines required to complete the initial wind farm near Palmerston North. The order brings the total for the project to 97, as was envisaged in the planning consent, it said. The stock traded on the NZAX market yesterday at NZ$3.05 and has fallen 5% this year. The company is 19.95% owned by Mighty River Power.

Xero (XRO): The business software developer said
Yesterday that it has 2,200 paying customers, a gain of 132% from March 31. The company said it has also built a "substantial" sales pipeline for the following half year.
The company counts Hell's Pizza, Sierra Coffee, Hot Chilly, NZ Brands, Touch NZ and Carpet One among its clients, it said in a statement. The shares rose 5.3% to 80 cents yesterday and are little changed this year.

By Jonathan Underhill



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