Stocks to watch: Allied Work, Fletcher, NZOG, Wrightson, Telecom

Thursday 17th September 2009

The following stocks may be active on the New Zealand exchange after developments since the close of trading yesterday.

Themes of the day: Shares rallied in the US and Europe amid growing optimism the world is climbing out of recession. The Standard & Poor’s 500 climbed 1.5%, helped by figures showing stronger US industrial production, and Europe’s Dow Jones Stoxx 600 rose 1.4%. The New Zealand dollar surged to as high as 71.41 US cents, the highest in 13 months. Among economic indicators out today, Bank of New Zealand releases its Performance of Manufacturing Index.

Allied Work Force Group (AWF): The worker-for-hire company said the first six months of its financial year “would be substantially down” on the year-earlier period, reflecting weaker levels of economic activity. Its first-half results are expected in early November. The company said it is in confidential talks to expand into a sector where it doesn’t currently provide labour. The shares last traded at 90 cents on September 14 and have climbed about 8% in the past month.

Fletcher Building (FBU): Shares of the nation’s largest construction company may extend gains from yesterday’s 16-month high as global optimism grows for a recovery from the economic slump. The shares rose 22 cents to $8.18 yesterday.

Marlin Global (MLN): Fisher Funds, the manager of the global equities investor, has hired KPMG to assess delisting Marlin because of concern it trades at too deep a discount to net tangible assets. The NTA was at $1.03 on September 8. The shares were unchanged at 82 cents yesterday.

New Zealand Oil & Gas (NZO): The oil company yesterday announced it had recalculated its 2009 dividend payment because it is in a transition period between the old 33% RWT tax rate payable on dividends and the new 30% corporate rate. As a result, New Zealand shareholders would receive about 4.8 cents payment in the hand, down from the previously advised 5 cents. The shares rose 1.8% to $1.70 yesterday.

PGG Wrightson (PGW): The nation’s biggest rural services company fell 2.7% to 71 cents yesterday after Silver Fern Farms advised that it may sell the 10 million Wrightson shares it got as part settlement of their failed merger. Silver Fern chairman Eoin Garden declined to comment on the likelihood the shares would be sold, saying the notice of the potential sale “gives us flexibility going forward.”

Telecom Corp. (TEL): Chief executive Paul Reynolds yesterday said the phone company was disappointed the government had opted to reject its proposal for the national broadband roll-out. Still, Milford Asset Management’s Alan Moore said Telecom probably will be invited back into discussions and this week’s claims and counter-claims amounted to sparring. The shares were unchanged at $2.68 yesterday.

Businesswire.co.nz

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