Market eyes Air NZ and GlobalCo

By SIMON HENDERY

Market watchers will continue to pay close attention to Air New Zealand this week as the national carrier's board meets today to discuss the planned Qantas buy-in.

Air New Zealand's A and B shares both got airborne on Friday after the Government confirmed it had commissioned a wide-ranging report on the company's future that among other things will look at the implications of an injection of taxpayer money.

"There are a lot more options opening up for Air NZ," said Macquarie analyst Arthur Lim.

But Nigel Scott, head of institutional dealing at ABN Amro, said the plethora of potential outcomes the company was wading through had a down side.

"There are far too many meetings, far too much information and misinformation ... There is scenario one to 20 here."

Away from the sharemarket, today's big news will be the vote by dairy farmers on the mega-merger proposal.

Kiwi Dairies and Dairy Group co-op members meet today to seal the fate of GlobalCo - a decision which could have a long-term impact on the sharemarket.

Apart from the significance to the economy in general, said Mr Lim, the GlobalCo decision would send ripples through listed rural sector companies such as Dairy Brands.

Also this week, brokers will be looking to the market surveillance panel for a resolution to the Lion Nathan defaulter securities dispute.

Mr Lim said he expected a compromise outcome without huge market impact.

"Given the [clout] of the parties involved - Lion and Allied Domecq - they could take this thing all the way to the Privy Council and that's not in anybody's interest."

The Commerce Commission is due to decide on Wednesday whether Fletcher Challenge offshoot Rubicon can sell its Challenge Petroleum business to service station rival Caltex.

Mr Lim said Rubicon's share price had rallied in recent weeks partly because the company's management had demonstrated a commitment to returning funds to shareholders.

The commission will also be in the spotlight on Friday, when it is due to rule on supermarket group Progressive Enterprises' expression of interest in competitor Woolworths New Zealand.

Progressive's parent company, Foodland Associated, is listed in Australia. The market reacted without enthusiasm last month when Foodland showed an interest in picking up Woolworths. Analysts think the Perth-based company already has enough on its plate.

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