Stocks to watch: AIA, AIR, KFL, MHI, PGW, PLU, RAK

Stocks to watch: AIA, AIR, KFL, MHI, PGW, PLU, RAK, XRO

July 26 (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: Investors are awaiting the central bank’s decision on Thursday on interest rates, which is expected to include a 25 basis point hike in the official cash rate to 3%. Before then, Australia releases inflation data which will give a clue to the pace of interest rate hikes in New Zealand’s biggest export market. The market optimism that prevailed at the start of last week eased towards the end, with the stress test of European banks by their national regulators revealing a mere seven of 91 failed. Investors’ attention will focus on the U.S. second-quarter GDP out on Friday. After three quarters of solid growth, the world’s biggest economy is showing signs of slowing. The kiwi rose to 72.70 U.S. cents from 72.40.

Auckland International Airport Ltd. (AIA): The international gateway’s Asian traffic has partially rebounded as total international passengers climbed 5.5% to almost 554,000 in June from a year earlier. Domestic passengers rose 4.3% to just over 477,000. Australia was the biggest source of passengers, rising 3.1% to 43.561. Its shares lifted 2% on Friday to close at $1.96.

Air New Zealand (AIR): the national carrier has criticized Auckland International Airport’s plan to acquire a quarter stake in Queenstown Airport and said airlines need to be offered the same opportunity. It called on the Commerce Commission to overturn the deal. The airline’s shares rose 2.8% to $1.11. Auckland Airport (AIA) rose 2.1% to $1.96.

Kingfish Ltd. (KFL): The NZX stock investor management by Fisher Funds Management plans to raise some $25 million in the next two years through a warrant issue to investors. Shareholders will get one warrant for every two shares held, and can subscribe to new shares at a price of 95 cents when they exercise the warrants. The shares were unchanged on Friday at 90 cents.

Michael Hill International Ltd. (MHI): The Australian and North American jewellery brand has elected to take a $20 million hit to the previously announced valuation of $294 million for intellectual property sold to its Australian arm following a query from the Australian Tax Office. Its shares lifted a cent on Friday to 70 cents.

PGG Wrightson (PGW): The nation’s largest rural services company is rated a ‘buy’ by Goldman Sachs JB Were analyst Adrian Allbon, according to the ShareChat website. Singapore-based Olam International's takeover offer for NZ Farming Systems Uruguay could allow Wrightson to realise $15.5 million of cash for its 11.5% stake, representing a $3 million gain on investment. Wrightson shares were unchanged at 51 cents on Friday. Farming Systems (NZS) rose 1.9% to 55 cents.

Pulse Utilities Ltd. (PLU): The NZAX-listed electricity retailer has announced plans for the issue of five million unlisted convertible notes, at a $1 face value, over the next 12 months, with two senior company executives expressing interest in subscribing for at least $100,000 in notes each. The company says it needs a further $3.5 to expand its operations and the notes issue will fund this. Its shares last traded on July 2 at 45 cents.

Rakon Ltd. (RAK): The maker of crystal oscillators used in GPS units and cell phones, advanced 3.2% to 98 cents on Friday, extending its gains on its plan to acquire rival Temex for 400,000 euros. While the purchase is minor in value terms it shows the company was actively looking to develop products in different markets, and the Temex buy should see benefits for investors in the medium to long term, said Grant Williamson, a director at Hamilton Hindin Greene.

Xero Ltd. (XRO): The online accounting company, which expects to break even in the second half of next year, surged 13 percent to $1.59 on Friday after announcing that internet entrepreneur Sam Morgan was increasing his stake to almost 5% and that customer numbers had grown to 22,000.

(BusinessDesk)

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