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Stocks to watch: GPG the centre of market attention today

Tuesday 29th June 2010

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The market liked Tony Gibbs's alternative plan for GPG, but clearly the board aren't happy with him speaking out so sacked him. No doubt market reaction to the latest GPG news will be watched closely by investors today. Also worth keeping an eye on today is Sky TV.

Themes of the day: There is increasing speculation that the chief executive of BP, Tony Hayward, will soon resign because of the debacle surrounding the oil spill in the Gulf of Mexico, with the president of Russia saying on Monday that he expected a resignation decision soon.

The Standard & Poor’s 500 index slipped 0.2%, and the FTSE 100 lifted 0.5%. The Dollar Index rose 0.4% to 85.68. The kiwi was little changed at 70.87 US cents from 70.86 cents. It fell below 71 cents yesterday on news of softer business confidence in New Zealand.

Guinness Peat Group (NZX: GPG ): Tony Gibbs was dumped from the board of Guinness Peat Group, after making an unauthorised statement objecting to the investment company's plan to spin off its Australian assets. "This action has been taken with much sadness but was unavoidable," chairman Ron Brierley said in a statement today. GPG shares climbed 3% to 68 cents yesterday. The shares had fallen as low as 61 cents in the wake of the original demerger announcement two weeks ago.

Cue Energy Resources (NZX: CUE ): The oil and gas company yesterday announced the sale of its 10.72% interest in the Papua New Guinean PRL8 licence area, which includes the Kimu gas field. The sale comes as Cue prepares to ramp up exploration in the adjacent PRL9 licence area. The stock last traded at 32 cents.

New Image Group (NZX: NEW ): The manufacturer of health tonics yesterday said its shares are undervalued and the company may re-introduce its share buy-back programme. New Image was responding to an NZX regulation inquiry into its shares, which have tumbled about 16% since the start of trading on June 23. The stock fell 5.9% to 32 cents yesterday.

Sky Network Television (NZX: SKT ): The private pay TV operator has positive momentum in its subscriber growth coming into a year containing the Rugby World Cup as a ‘killer event’ said First NZ Capital analyst Sarndra Urlich in ShareChat. News Corp’s US$12 billion ($17 billion) takeover offer last week for the 61% of Britain’s BskyB pay TV operator is likely to support the sector over the near term by Urlich doesn’t believe News Corp is interested in taking out Sky’s minorities. News Corp owns 44% of Sky. Its shares fell 16 cents yesterday to $4.75.

Smiths City (NZX: SCY ): The Christchurch furniture and electronics retailer yesterday reported a net profit of $1.64 million in the year to April 30, up 62% on the previous year, after it slashed its interest bill as sales fell 5.3% to $226.1 million. The shares fell 3.1% to 31 cents yesterday.

Allied Farmers (NZX: ALF ): The rural services and finance company is still negotiating its banking facilities for the next financial year. The firm said it has yet to reach an agreement with its principal banker, Westpac, and another lender. Allied has drawn down $16.5 million on its Westpac credit line, and has an overdraft of $2.5 million that expires on July 1. The stock fell 4.7% to 4 cents yesterday.

Businesswire.co.nz

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