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Stocks to watch: Guinness Peat Group, F&P Appliances, Air NZ, TEL, HED, NAP

Tuesday 11th May 2010

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Guinness Peat shares tumble as 'value return' fails to materialise at AGM and Vodafone and Axia team up for broadband bid. F&P Appliances plans to take $26.5 million impairment charges in full-year results and the Takeovers Panel announce that Horizon Energy Distribution didn't breach the takeovers code.


Guinness Peat Group (NZX: GPG ): The shares dropped 3.4% to 85 cents yesterday on disappointment the investment group didn’t announce a ‘value return’ to shareholders at their annual meeting in London on Friday, as it had intended. Chairman Ron Brierley said GPG was “making progress and will continue to do so,” he said. “Brierley in the early days was a company that attacked asset-rich companies which were not maximising the value,” Goldman Sachs JBWere’s asset management head Stephen Walker said. “The favourite target was companies with some characteristics of conglomerates, which is exactly what GPG has become.”

Telecom  (NZX: TEL ): Vodafone New Zealand will team with Canada's Axia NetMedia to bid for participation in the government's planned ultra-fast broadband initiative. State-owned Crown Fibre Holdings is mulling more than 30 proposals to participate in its $1.5 billion broadband initiative. Telecom fell 0.9% yesterday to $2.11. 

Fisher & Paykel Appliances Holdings (NZX: FPA ): The only home appliance maker on the NZX said it plans to take impairment charges over its assets of up to $26.5 million in its full-year result. At the time of its first-half results in November, FPA forecast a full-year net loss of $58 million to $65 million, reflecting charges against its North American business. The shares fell 1.6% to 62 cents yesterday.

Air New Zealand  (NZX: AIR ): The national carrier is rated a ‘buy’ by Craigs Investment Partners analyst Geoff Zame. Its proposed trans-Tasman alliance with Virgin Blue, which excludes domestic-only travel within Australia and New Zealand, "represents an alluring proposal for Air New Zealand shareholders," Zame said, according to the ShareChat website. The stock rose 1 cent to $1.26 yesterday.

Horizon Energy Distribution  (NZX: HED ): The Takeovers Panel yesterday announced that the North Island electricity distributor didn't breach the takeovers code when announcing revised guidance last year on the eve of a takeover offer from Marlborough Lines. The stock dropped 3.6% to $3.47 yesterday.

National Property Trust (NZX: NAP ): The 4.8% fall in the trust’s property valuation over the past 12 months is in line with expectations, said Forsyth Barr analyst Jeremy Simpson in ShareChat. NAP doesn’t have much exposure to Auckland and Wellington property rentals, with its main asset the Eastgate Shopping Centre in Christchurch, as well as regional properties in Hastings, Napier and Tauranga. “While market rents are weaker, National has been able to achieve rental growth with its rental reviews of plus 5%, given underlying growth since previous rent reviews,” Simpson said. He estimates its property valuation fall has cut net tangible assets per unit to 72 cents from 82 cents. Its price was unchanged yesterday at 48 cents.

Economic themes of the day:  Stocks rallied around the world as Europe's 750 billion euro rescue package soothed fears of a spreading sovereign-debt crisis.

The Chicago Board Options Exchange Volatility Index, or VIX, which is known as Wall Street's ‘fear gauge', dropped 26% to 30.25.

In late trading, the Dow Jones rose 3.3%, the Standard & Poor's 500 Index gained 3.7% and the Nasdaq Composite advanced 4.2%. In the UK, the FTSE 100 gained 5.16%, Germany's DAX jumped 5.3% and France's CAC 40 soared 9.7%.

The Dollar Index, which measures the greenback against a basket of six major currencies, fell 3.55% to 84.15. The euro jumped as much as 2.7% against the greenback.

The kiwi lifted to an almost two year high against the euro overnight to 56.44 from 55.73.

Data on April credit and debit card spending is due out today, which will provide a clue to consumer demand.

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