Stocks to watch: New Zealand equity preview

Wednesday 26th November 2008

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

Themes of the day: The US Federal Reserve announced a further US$800 billion in funding programs to thaw the credit market, buying mortgage-related debt and targeting loans for small businesses and consumers.

Air New Zealand (AIR): Prime Minister John Key is seeking urgent advice over the tax hike for New Zealand-bound passengers from Britain, one of New Zealand's largest tourism markets. With higher costs and falling demand, Air NZ will discuss the issue with the government as it looks to protect itself from fewer international passengers. The company's share price is at 87 cents and has fallen almost 55% in the past 12 months.

Comvita (CVT): The manufacturer of honey-based products said sales jumped 38% to $$31.6 million in the six months ended September 30. The net profit was $203,000 from a year-earlier loss of $1.4 million. The company is “experiencing continued growth ahead of budget compared to last year in key markets such as Hong Kong, Australia, Taiwan and Japan,” said chairman Neil Craig. Still, “we are starting to see a softening of sales in some markets, particularly the UK” The stock was unchanged yesterday at $1.20 and has dropped 55% this year.

National Property Trust (NAP): The property investor today said its operating surplus before tax rose 41% to $4.72 million in the first half. The result was assisted by lower interest expense and no performance fee being incurred during the period, it said. The stocks was last at 39 cents and is down 33% this year.

Nuplex Industries (NPX): The manufacturer of resins and ingredients used to make paint, printing ink and adhesives yesterday cut its earnings forecast for 2008/09 by as much as $25 million. Weak demand in the past two months prompted the company to reduce its earnings forecast to as little as $105 million, a fall of over 19%. Nuplex’s share price fell 15% to $3.82 yesterday.

RLV No. 3 (RLV): The shell company set up as a low-cost way to list on the New Zealand stock exchange said it has completely due diligence on Minera Varry, the Chilean mining concession holder it will acquire and list as Orion Minerals Group. The proposal now requires approval of RLV shareholders, who arte scheduled to meet on December 10. The shares last traded at 22 cents on November 11.

By Jonathan Underhill

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