Stocks to watch: HED, PEB, PFI, TTK, TEL, TLS, WDT

Stocks to watch: HED, PEB, PFI, TTK, TEL, TLS, WDT

Aug. 3 (BusinessWire) – The following stocks may be active on the New Zealand exchange after developments since the close of trading. All prices are in New Zealand dollars unless specified.

Themes of the day: Stocks on Wall Street and in Europe gained as strong earnings from European banks stoked investors’ optimism about the state of the global recovery. The quarterly employment survey and labour cost index are due out today in the first round of labour data, while the Reserve Bank of Australia reviews the target cash rate and is expected to keep it on hold at 4.5%. The kiwi rose overnight to 73.26 U.S. cents from 73.14 amid the increased appetite for higher yields.

Horizon Energy Distribution Ltd. (HED): Marlborough Lines Ltd. yesterday extended its offer for shares in the electricity distributor for a second time, giving shareholders a further week to sell. Marlborough is aiming to lift its holding to 15% from 10.1%, offering $4.06 a share. As at the company’s last disclosure on July 26 it had 12.5% of the stock. The stock traded unchanged at $4.06 yesterday.

Pacific Edge Biotechnology Ltd. (PEB): The shares soared 14% to 25 cents yesterday after the cancer diagnosis firm said it has a “pipeline of new products coming through” after winning New Zealand patents for gastric cancer detection and melanoma prognostic technology.

Property for Industry Ltd. (PFI): New Zealand’s only listed company specialising in industrial property posted a non-cash loss of $35.5 million due to the government’s tax depreciation changes, but excluding that charge posted a $9.2 million net profit. Occupancy of its buildings is at 99.9%, and there was no change in valuation following its end of June result. Its shares dropped one cent yesterday to $1.13.

TeamTalk Ltd. (TTK): The communications company’s CityLink unit has amended its proposal to Crown Fibre Holdings to partner the government in delivering a fibre-to-the-home network in the Wellington region. “This is a great opportunity for the government to break with the past,” said managing director David Ware. The shares last traded at $2.10 on July 30.

Telecom Corp. (TEL): The company has proposed structural separation into two units that would carve network business Chorus out as a standalone company. The company “has gone from aggressively resisting to playing ball” with Crown Fibre, said Paul Harrison, who manages $330 million of equities at BT Funds Management. The shares plumbed a two-decade low in June and their recovery since then probably reflects the company “offering a better probability of a positive outcome.” The stock rose 0.5% to $2 yesterday, the highest close since May 20.

Telstra Corp. (TLS): Australia’s largest phone company announced on Friday that it would take a A$170 million impairment charge against its CSL New World unit in Hong Kong. That may wipe out profit growth over the past 12 months. The company said its previous forecast for "low single digit" EBITDA growth didn’t include the impairment and earnings may now weaken on that measure. The stock rose 1% to $4.07 yesterday.

Wellington Drive Technologies Ltd. (WDT): The electric motor manufacturer and marketer continues to disappoint on the earnings front, and its breakeven point has been pushed out even later, according to Forsyth Barr analyst Andrew Harvey-Green. The ShareChat website reported Harvey-Green expects the company to become EBIT profitable in the first half of 2012 and cashflow breakeven by the second half of 2012, and that the company will have to raise yet more fresh capital within the next three or four months. The shares were unchanged yesterday at $0.09.

(BusinessDesk)

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