23 Aug 2010

Rise in Allied Farmers shares

10:33 pm on 23 August 2010

Shares in Allied Farmers rose more than 10% on Monday, due to market punters picking up bargains.

The company's finance arm, Allied Nationwide Finance, went into receivership on Friday, owing about $130 million to 4500 investors. Their deposits are covered by the Government's retail deposit guarantee.

Securities in Allied Nationwide Finance were suspended from trading on the stock exchange on Monday morning at the request of the receivers.

Kerryn Downey and Andrew Grenfell of McGrathNicol say they have taken control of the finance company's assets and loanbooks.

They will be working closely with the lender's senior management to go through them over the next few days.

Shares in Allied Nationwide's parent, Allied Farmers, which continue to trade, fell to 2.6 cents on Friday, but recovered those losses on Monday.

Stock brokers suggest punters are buying shares now, in the hope they will rise from near record-lows.

Meanwhile, Allied Farmers says it is still in discussions with the underwriter of a proposed $19.3 million capital raising and hopes to make an announcement soon.

Shares in Allied Farmers rose by almost 0.30 cents to 2.9 cents on Monday, with $32,000 worth of shares changing hands.