Stocks to watch: New Zealand equity preview

Monday 10th November 2008

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

Themes of the day: Prime Minister-elect John Key has said he wants 40% of the national pension fund to be invested in New Zealand. The average New Zealand house price fell 6.8% in October from a year earlier as the nation's prolonged economic contraction sapped demand for property.

Stocks gained on Wall Street and in Europe on speculation the Federal Reserve is ready to slash rates again next month and as falling prices spurred some investors to increase equity holdings. China will spend as much as 4 trillion yuan (US$580 billion) on a fiscal stimulus plan to stoke growth in its economy.

APN News & Media (APN): The NZX-listed shares of the Australia media company, which owns The New Zealand Herald, jumped 16% to $3.32 on Friday compared to their previous trade on October 31. Irish billionaire Tony O'Reilly is contemplating selling his company's 39% stake in APN News & Media after receiving approaches. The sale could more than half Independent News's net debt to less than 600 million euros.

On Friday, APN told the ASX that economic conditions "will remain challenging and advertising bookings remain very short term. Profit this year may be at the low end of analysts' forecasts of about A$148 million.

Fletcher Building (FBU): Australia's construction industry contracted for an eighth straight month in October, according to a report by the Australian Industry Group and Housing Industry Association last week.

Separately, US employers shed a greater than expected 240,000 jobs last month, a sign that the world's biggest economy may stumble into recession. The shares fell 43 cents to $5.68 and have dropped 14% in the past three months.

Freightways (FRE): The transport company acquired the business and assets of Perth-based Access Information Management, which operates a document and data storage business in Perth. The purchase price for Access is A$3.5 million. Access is expected to generate EBITDA of approximately A$600,000 million in the 12 months following its acquisition and lift per-share earnings immediately. The stock traded at $3.04 on Friday and is down 18% this year.

ING Medical Properties Trust (IMP): The trust told unit-holders at their annual meeting on Friday that its core portfolio will continue to perform well over the course of this year and that it would at least maintain its 2008 level of dividend payment in 2009. The units rose about 1% to $1.06 on Friday and have dropped 10% this year.

New Zealand Oil & Gas (NZO): Crude oil for December delivery rose 0.4% to US$61.04 a barrel on the New York Mercantile Exchange. The stock fell 5% to $1.29 and is up 12% this year.

Telecom (TEL): Telecom stands to benefit from the incoming National-led government's pledge to invest up to $1.5 billion into an ultra-fast broadband network for 75% of the population. The policy promises to double the Broadband Challenge Fund and improve broadband coverage in rural and remote areas. The stock traded at $2.26 on Friday and has slumped 48% this year.

Windflow Technology (WTL): The wind turbine manufacture is in "great shape" financially, with no debt, a year-long order book and about $23 million in cash, chairman Barrie Leay told shareholders at their annual meeting in Christchurch on Friday. The share last traded at $2.95 on October 28 and have fallen about 5% this year, a sixth of the NZX 50's slump.

By Jonathan Underhill

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