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Stocks to watch: GPG, NZO, RBD, TEL, CVT, SPY, ZIN

Monday 10th May 2010

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Guinness Peat investors have been told to wait longer for 'value return' and an expert predicts crude oil may hit US$100 a barrel in the near future. Restaurant Brands is seeking a trade buyer for its 41 Starbucks stores and Telecom reports a drop in third-quarter earnings.


Guinness Peat Group (NZX: GPG ): The investment company told shareholders at their annual meeting in London on Friday that they will have to wait longer for details of its much-touted “value return.” Part of the delay was due to Guinness Peat shares being traded on three exchanges, a model “which no longer works for GPG.” Chairman Ron Brierley said “a few more weeks, or months, if necessary, is not critical.” The shares fell 1.1% to 88 cents on Friday.

New Zealand Oil & Gas (NZX: NZO ): The prices of crude oil may hit US$100 a barrel, said Michael Economides, professor at the University of Houston, at the International Association of Independent Tanker Owners conference in London. “I think $100 is around the corner. There are no alternatives to hydrocarbon energy sources in the near future,” he said, noting the surging demand in China, Bloomberg reported. The shares fell 2% to $1.47 on Friday.

Smart Pay  (NZX: SPY ): The EFTPOS services company announced last week that it will eliminate about 40 jobs in manufacturing terminals and outsource the work to specialist companies. The shares rose 5% to 4.1 cents on Friday.

Restaurant Brands  (NZX: RBD ): The fast-food franchise operator is seeking a trade buyer for its 41 Starbucks stores, which may be worth $10 million to $20 million, while progressively selling Pizza Hut stores to owner-operators, chief executive Russel Creedy said, according to the NZ Herald. The shares fell 7 cents top $2.22 on Friday and have climbed more than 30% this year.

Telecom  (NZX: TEL ): The nation’s biggest phone company on Friday reported a 39% drop in third-quarter earnings, less than some analysts had expected. It reiterated that full-year adjusted earnings will be at the low end of its $400 million to $440 million range. The stock slipped 0.9% to $2.13 on Friday, having briefly sunk as low as $2.07, the lowest since the early 1990s. Fairfax Media reported that Alcatel-Lucent, which built Telecom’s troubled XT network, may have agreed to credit Telecom $100 million to compensate it for the failures.

Comvita  (NZX: CVT ): The honey products company is rated a ‘buy' by Selwyn Blinkhorne, an analyst at Craigs Investment Partners, according to the ShareChat website. He said unaudited sales, profit and net debt in the year ended March 31 were significantly better than in 2009. Blinkhorne raised his earnings forecasts 12% to 16%, mainly reflecting lower interest costs on lower debt levels, while predicting a higher dividend payment. The stock fell 5.7% to $2.13 on Friday.

Zintel Group  (NZX: ZIN ): The telecommunications group NZ operations, known as Zintel Cogent, announced on Friday that it had entered into a Mobile Virtual Network Operator agreement with Telecom to wholesale its WCDMA cellular network. The deal allows Zintel Cogent to meet more of its customers’ needs and provide a one-stop shop for telecommunication solutions, it said. The shares last traded on May 6 at 29 cents.

 

Economic themes of the day: Shares ended the week lower on Wall Street amid fears Europe’s debt crisis won’t abate soon.

The Standard & Poor’s 500 sank 1.5%, rounding out a week-long 6.4% slide.

Prime Minister John Key said this month’s budget will show “further improvement” in the projected peak levels of debt.

The domestic economy is recovering faster and is in better shape than most of the nation’s trading partners, he told the National Party conference.

 

Businesswire.co.nz



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