Stocks to watch: New Zealand equity preview

Thursday 15th January 2009

The following stocks may be active on the New Zealand exchange after developments since the close of trading yesterday.

Themes of the day: Stocks tumbled on Wall Street and in Europe after figures showed American retail sales slumped last month, Deutsche Bank posted a record fourth-quarter loss and the German economy contracted as much as 2% in the final three months of 2008. Oil and copper declined and US Treasury bonds rose. In New Zealand, Prime Minister John Key has called a meeting of senior ministers to discuss the economy. The New Zealand dollar dropped below 54 US cents.

Cavotec MSL Holdings (CCC): The engineering group today said it won two orders for ground support systems and associated equipment from Shanghai Hongqiao International and Guangzhou Baiyun International airports in China. The shares last traded at $2.97 on January 9 and are down 16% in the past month.

Fletcher Building (FBU): The slump in US retail sales points to a broader and deeper recession than some economists had expected, hurting companies with sales in the US Shares of Fletcher, which owns the Formica laminates brand, fell 10 cents to $5.89 yesterday and are down almost 45% in the past 12 months.

New Zealand Oil& Gas (NZO): Crude oil dropped after figures showed US inventories climbed by 1.14 million barrels to 326.6 million barrels last week, the highest since 2007. Crude for February delivery fell 1.1% to US$37.35 a barrel on the New York Mercantile Exchange. Shares of NZOG rose 2 cents to $1.24 yesterday and are down 4.5% in the past month.

Pan Pacific Petroleum (PPP): The Australian Foreign Investment Review Board has told New Zealand Oil & Gas that is won't object to NZOG increasing its stake in the Australian oil company. NZOG last month acquired a strategic stake in Pan Pacific and now has voting rights of almost 15%. NZOG had sought approval to acquire up to 19.99% of Pan Pacific or make a full takeover. Pan Pacific rose 2 cents to 40 cents yesterday and has soared 21% in the past month.

Telecom (TEL): Telecom, Vodafone and NZ Communications made undertakings to the Commerce Commission as part of an effort to avoid regulation of mobile termination access services. The regulator is investigating whether services such as mobile-to-mobile voice termination, fixed-to-mobile voice termination and short-message-service termination should become regulated services. Telecom fell 4 cents to $2.48 yesterday and has declined 40% in the past 12 months.

Tourism Holdings (THL): The outlook for tourist arrivals this year is "challenging," Shamubeel Eaqub, economist at Goldman Sachs JBWere said in a report today. While a weaker kiwi dollar will provide some offset to the impact of global recession, Eaqub forecasts visitor arrivals to fall 5.3% in 2009 and 0.2% in 2010. Shares of the nation's biggest campervan operator were unchanged at 70 cents yesterday and have dropped 66% in the past 12 months.

By Jonathan Underhill

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