Stocks to watch: CAV, FBU, NZO, PGW, SKT, TEL, WDT

Stocks to watch: CAV, FBU, NZO, PGW, SKT, TEL, WDT

Feb. 7 (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: The positive close on global equity markets last week, which rose on the back of stronger corporate earnings and improved U.S. manufacturing and unemployment numbers, is likely to start local trading off on a positive footing. The Standard & Poor's 500 Index closed 0.3% up at 1310.87, its highest level in nine weeks, while in Europe the Stoxx 600 closed 0.3% higher at 285.9.

Fletcher Building Ltd. (FBU): Independent experts Ernst & Young last week cautioned that Fletcher's cash-and-scrip bid for Australia's Crane Group, which is at the low end of the value range, makes it vulnerable to sudden movements in the company's share price. Fletcher's revised offer for the company is A$10.07, consisting of one Fletcher share, A$3.50 in cash for each Crane share, and an A$0.50 per share fully franked special dividend. The shares rose 1.6% on Friday to $8.04.

New Zealand Oil & Gas Ltd. (NZO): Global oil prices could hit US$110 a barrel if political unrest in Egypt continues, according to Imad al-Atiqi, a member of Kuwait's Supreme Petroleum Council, quoted by Reuters. Oil prices broke the $100 a barrel mark for the first time since 2008 on fears the political instability in Egypt could spread to other oil producers in the region. NZO shares, the energy exploration and production company, were unchanged on Friday at 36 cents.

PGG Wrightson Ltd. (PGW): The rural service company is set to release an independent assessment of a 60 cents a share partial takeover offer from Singapore's Agria Corp. today, as well as its interim results. The company has also received another offer from another party who is looking at making a full takeover offer, although details on the bid have not been released. The shares rose 12.7% on Friday to 62 cents, the highest level in 12-months.

Sky Network Television Ltd. (SKT): The pay television operator's business is now reaching maturity, with an estimated 50% penetration among New Zealand households, say Deutsche Bank analysts Geoff Zame and Andrew Anagnostellis, quoted on the ShareChat website. They expect the company to report a $60.7 million net profit for the six months ended December 2010, up 19.5% on the same period preciously. The shares rose 0.6% on Friday to $5.38.

Telecom Corp. (TEL): Telecommunications Minister Steven Joyce confirmed widespread speculation that the government is entering commercial negotiations with a joint venture between Telecom and Vodafone to provide ultra-fast broadband services to rural New Zealand. Joyce said the joint proposal was the only one that increased mobile coverage, with many rural customers to get options of fixed wireless, ADSL2+ and mobile broadband. Negotiations will be undertaken over the first quarter of 2011 with the roll out due for completion by 2016. The shares rose 0.9% on Friday to $2.24.

Wellington Drive Technologies Ltd. (WDT): The manufacturer of electric motors has completed its one-for-one renounceable rights issue at 1.25 cents a share, raising $8.4 million in the process. The proceeds from the issue will be used to invest in working capital needed as sales expand, to fund operating losses and to fund the company's capital expenditure. The shares were unchanged at 2.2 cents.

(BusinessDesk)

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