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Stocks to watch: Comvita, DNZ Property, Michael Hill

Friday 8th October 2010

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Comvita has sold a 3.5% stake in the company as part of a strategic alliance, DNZ Property has been added to the NZX 50 after less than two months since first floating on the NZX main board, while Michael Hill says sales for the three months to the end of September were up almost 13%.

Comvita (CVT): The medical honey products developer announced the sale of a 3.5% stake in the company for $2 million to its Asian partners as part of a strategic alliance in the region. GPE, the master agent in China, and Aju Pharm, a distribution partner in South Korea, bought 500,000 shares each at $2 per share by way of a private placement. Shares were unchanged yesterday at $1.90. 

DNZ Property Fund (DNZ): The fund has been added to the NZX 50, just under two months after floating on the NZX main board. The move comes after New Zealand Farming Systems Uruguay was removed from the NZX 50 following Olam International's acquisition of a 78% stake in the South American dairy operator. Ranking for the NZX 50 is by NZ free float market capitalisation, from which large strategic holdings are excluded. Shares rose 0.9% yesterday to $1.13. 

Michael Hill International (MHI): The jewellery manufacturer and retailer said sales for the three months to the end of September were up 12.8% to $95.4 million compared to the same period in the previous year. Chairman Michael Hill said the company was "very satisfied" with the gains made in all markets, even though the effects of the global financial crisis were still being felt in the corresponding quarter in 2009. Shares rose 4.4% yesterday to 71 cents. 

Lyttelton Port (LPC): The port's container terminal will continue to sink for up to three years and about 40% of its wharves have major damage as a result of the Canterbury earthquake that struck on September 4, according to press reports. The port, which was fully insured, had previously put damage estimated at $50 million but has said this is likely to be revised. Shares fell 1.6% yesterday to $2.44. 

NZ Oil & Gas (NZO): Oil prices fell more than 2% overnight, pulling back from five-month highs above US$84 as a recovery by the US dollar prompted commodities investors to book profits ahead of a crucial US payrolls report. Shares in the energy exploration and production company were unchanged yesterday at $1.33.  

Telstra (TLS): The telephone company will have a tough time convincing sceptics that its latest attempt to transform its business will succeed, said Aegis Equities Research analyst Peter Warnes, quoted on the ShareChat website. Project New aims to improve customer service, retention and growth in customers and to simplify the business and is service oriented rather than aimed at cutting costs, and follows on from a similar initiative in 2005. Shares rose 0.9% yesterday to $3.45 on the NZX.  

Themes of the day: Wall Street fell overnight, with the Standard and Poor's 500 Index down 0.2% to 1,158.06 at 4pm US EST.

Third quarter reporting season starts in the US today, with Alcoa expected to report adjusted earnings of US6 cents a share for the three month period up from 4 cents a share in the previous year, according to forecasts.

Markets will be looking for a 75,000 jobs gain from America's private sector labour market when non-farm payroll data comes out in the US. The New Zealand dollar fell from an 11-month high after the European Central Bank president criticised "disorderly" currency moves and threw his support behind a strong greenback. Trading starts today on the NZX's new dairy futures platform.

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