Stocks to watch: AIR, AIA, ALF, MVN, NUF, SKL

Stocks to watch: AIR, AIA, ALF, MVN, NUF, SKL

July 16 (BusinessWire) – The following stocks may be active on the New Zealand exchange after developments since the close of trading in the last session. All prices are in New Zealand dollars unless specified.

Themes of the day: New Zealand’s second-quarter consumer price index probably grew 0.5% in the period, and isn’t expected to hold any surprises that will impact on the Reserve Bank’s track for monetary policy with the big inflationary pressures coming in the third and fourth quarters. Markets are betting the central bank will hike the official cash rate by 128 basis points over the coming 12 months, according to the Overnight Index Swap curve. Stocks on Wall Street were mixed as weak manufacturing data continued the grim picture for the American economy, though Goldman Sachs Corp’s US$550 million settlement with regulators over its fraud lawsuit, while lender JP Morgan & Co. continued the theme of upbeat corporate earnings. The government is reportedly looking to free up labour laws by extending its 90-day probation period, where an employer can terminate employment without fear of a grievance claim, to large companies.

Air New Zealand Ltd. (AIR): The national carrier denied media reports that its planned alliance with Virgin Blue had resulted in it buying shares in the Australian airline. “Air New Zealand is conscious that airline alliances such as the one planned with Virgin Blue frequently include an equity aspect, but the proposed alliance does not do so.” The regulatory approvals for the tie-up are still in process and the airline has had no indication of the outcome of this decision. The shares fell 1 cent to $1.03 yesterday.

Auckland International Airport (AIA): Opposition to the airport’s $27.7 million investment in a quarter stake of Queenstown’s airport is growing, with a group called the Queenstown Community Strategic Assets Group calling for the deal to be unwound. The high-powered group includes two former mayors of the alpine district and local business leaders. A spokesman warned the sale would become a key issue at local body elections. Separately today, the airport announced an extended suspension of work on its second runway. The shares were unchanged at $1.96 yesterday.

Allied Farmers Ltd. (ALF): Shares of the finance company surged 17.7% to 4 cents after it confirmed the unconditional sale of the second stage of Queenstown’s undeveloped Five Mile block. Shares of Allied have slumped 70% this year after the company was forced to write down the value of loans purchase from Hanover and United Finance by about two thirds.

Methven Ltd. (MVN): The tap and bathroom fittings manufacturer rose 2.1% to $1.46 yesterday. The Accident Compensation Corp. yesterday disclosed it had increased its holding in the company to 7.7% from 6.5%

Nufarm Ltd. (NUF.AU): The agricultural chemicals maker part-owned by Japan’s Sumitomo Chemical, tumbled 27.7% to A$3.79 on the ASX yesterday after the company slashed its full-year guidance on weaker sales in North America, Europe and Australia. Since then, Standard & Poor’s has cut the company’s credit rating to junk level, BB, from BBB-, saying its financial profile is “aggressive.”

Skellerup Holdings (SKL): The manufacturer said director David Mair has been appointed as acting chief executive starting on July 26. The company announced in April that long-serving managing director Donald Stewart had decided to leave the company. The shares rose 1 cent to 73 cents.

(BusinessDesk)

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