Stocks to watch: ATM, KIP, NZS, PGW, STU, TLS, TUR

Stocks to watch: ATM, KIP, NZS, PGW, STU, TLS, TUR

August 13 (BusinessDesk) – 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 in the U.S. dropped for a third straight day as a worse-than-expected report on U.S. jobless claims, which rose to their highest level since mid-February, fuelled concern about the troubled labour market in the world’s largest economy.

New Zealand’s manufacturing sector faces a grim outlook, after data showed new orders have taken a steep dive in July, dropping almost 10 index points from June to 47.6. The BNZ-Business NZ Performance of Manufacturing Index provides an early indicator of activity levels, with a reading above 50 indicating expansion, below 50 a contraction.

A2 Corp. (ATM): The producer of A2-variant dairy products in New Zealand and Australia has appointed Geoffrey Babidge as managing director, effective next month. Babidge had previously served as chairman of A2 Dairy Products Australia, a joint venture formed by A2 and ASX-listed Freedom Nutritional Products Ltd. The stock last traded at 9 cents on August 6.

Kiwi Income Property Trust (KIP): The trust told investors at its annual meeting that it is well positioned to capitalise on New Zealand’s recovery - when it happens. It sees early signs of this turnaround already, with property values stemming their losses to 0.5% in the last six months versus 14% over the last two years. The shares were unchanged at 94 cents.

NZ Farming Systems Ltd. (NZS): The South American dairy operator facing a takeover bid by Singapore’s Olam International has gained a tax concession from the Uruguay government with an estimated current value of NZ$28 -NZ$35 million, according to a company statement. The benefits will be available to offset the company’s tax liability once it becomes profitable, which is anticipated to be in the 2011-12 financial year. Farming Systems shares last traded at 56 cents, one cent above Olam’s offer.

PGG Wrightson Ltd. (PGW): New Zealand largest rural services company has reported EBITDA of NZ$70.5m and net profit after tax of NZ$23.3m for the year ended 30 June 2010, in line with forecast of NZ$73.2m and NZ$24.1m respectively Excluding the Government’s recent tax changes to building depreciation of $2.0m, underlying net profit after tax was $25.3m. Group revenues were at $1.1bn (2009: $1.3bn). Shares were unchanged at 56 cents.

Steel & Tube Holdings (STU): The supplier of steel products to the construction industry, fell 3.2% to $2.15 yesterday after posting a 78% slump in full-year profit as a lacklustre construction sector weighed on demand. The Wellington-based company made a net profit of $5.7 million, down from $26.1 million a year earlier.

Telstra Corp. (TLS): Australia’s biggest phone company dropped 9.7% to $3.73 on the NZX yesterday after posting a decline in earnings and forecasting further weakness.

Turners & Growers (TUR): The fruit distributor yesterday reported a 10% increase in underlying earnings to $11.8 million for the first-half of its financial year, short of analysts’ expectations. The stock fell 3.5% to $1.40 yesterday.

(BusinessDesk)

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