Stocks to watch: ALF, DPC, LME, PGC, SKL, SKC, WFD

Stocks to watch: ALF, DPC, LME, PGC, SKL, SKC, WFD

July 1 (BusinessDesk) – 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: Shares weakened on Wall Street, rounding out the worst quarter since the Lehman Brothers collapse, with the Standard & Poor’s 500 Index falling 12% in the latest three months. At home, the cost of the Emissions Trading Scheme on transport and stationary energy plants kicks in today. The kiwi dollar sank to 68.53 U.S. cents from 69.40 cents yesterday, as investor appetite for risk waned.

Allied Farmers Ltd. (ALF): The finance company which took on the Hanover and United loan books in a debt-for-equity swap last year has accused Hanover Finance’s founders of breaching their agreement and said it plans to take legal action. “Assessing the loan book was a very difficult task because it was very complicated book,” said Alan Moore of Milford Asset Management. “It is not surprising that some problems seem to have come to light now that each individual item has been looked at.”

Dorchester Pacific Ltd. (DPC): The finance company managed to avoid receivership by convincing investors they will get more from accepting a complicated asset swap. Some 7,200 investors agreed to swap $84 million of debentures for units in a property trust, new Dorchester shares, interest-bearing 3-year notes and options to buy more stock. The shares dropped 13% to 9 cents yesterday.

L&M Energy Ltd. (LME): The coal seam gas development company tumbled 13% to 13 cents yesterday after announcing it had completed a placement of about A$7 million to raise funds to develop its coal seam gas project in Southland. The company sold about 77 million shares at 9 Australian cents apiece.

Pyne Gould Corp. (PGC): The finance company’s Marac unit announced the purchase of GMAC New Zealand’s retail motor vehicle financing book, including secured loan receivables, finance and operating leases, for $70 million in cash. The purchase will significantly expand Marac’s presence in motor vehicle financing, said Chris Flood, the firm’s GM for personal finance business. Pyne Gould’s shares were unchanged at 38 cents yesterday.

Skellerup Holdings (SKL): The manufacturer rose 7.9% to 68 cents yesterday after lifting its forecast full-year profit to between $10 million to $11 million, including a one-time charge of $2.4 million. It said the increase was due to a pickup in its Industrial division in the second half.

Sky City Entertainment Group (SKC): The hotel and casino chain is rates a ‘buy’ by Jeremy Simpson, an analyst at Forsyth Barr, according to the ShareChat website. Sky is well placed for medium-term operational gains from its refurbished Auckland casino when the economy picks up, probably in 2011 and 2012. EBITDA was probably flat in the current year, with a modest improvement in Australia offset by weaker performance at the Auckland casino. The stock fell 1 cent yesterday to$2.85.

Wakefield Health Ltd. (WFD): The hospital investors said yesterday that it again failed to win enough support from shareholders of Norfolk Investments for its takeover offer, which is aimed at taking control of Grace Hospital in Tauranga. Wakefield had said it had biding acceptances for more than 50% of the stock. The shares were unchanged at $6.90 yesterday.

(BusinessDesk)

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