Stocks to watch: New Zealand equity preview

Friday 12th December 2008

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

Themes of the day: America's trade deficit unexpectedly widened to US$57 billion while the number of people seeking unemployment benefits rose to the highest level since 1982, stoking concern about a worsening slump in the world's biggest economy. Crude oil surged 11% after OPEC member Saudi Arabian said it reduced output more than expected. In New Zealand today, government figures may show retail sales growth stalled in October.

Abano Healthcare (ABA): Managing director Alan Clarke said in the company's newsletter that growth has "continued unabated" in the 2009 financial year. Demand for private healthcare "continues to grow" and the company expects second-half earnings growth to exceed the first six months. The shares traded at $4.50 yesterday and are down about 10% this year.

Cavalier (CAV): The only carpet maker on the benchmark index has leaped about in recent sessions on relatively low volumes. The stock jumped 8.7% to $2 yesterday as just 2,278 shares changed hands. It reached a record low $1.80 on December 9. In August, the company posted a 14% gain in annual profit to $17.9 million, partly reflecting the contribution from Norman Ellison Carpets.

Fisher & Paykel Healthcare (FPH): The medical equipment maker said its performance in the six months ended September 30, the introduction of new products and growth in international sales "gives us confidence that we can achieve continuing strong revenue and earnings growth for the full year," it said in its interim report, released today. The shares traded at $3.05 yesterday and are down about 12% this year.

NZX (NZX): The operator of the New Zealand stock exchange edged up 0.6% to $5.50 yesterday after the board of Bond Exchange of South Africa recommended shareholders accept the Johannesburg Stock Exchange takeover offer of 125 rand per share. NZX is the biggest shareholder in BESA, having acquired its 22% stake on October 3 for 73.17 rand, amounting to a 71% profit in just two months.

SmartPay (SPY): The electronic product distribution and payments processing company agreed to the terms under which it will acquire FIVO from NATCOM to become the nation's largest provider of Wi-Fi services.The deal includes managing all of Telecom Corp.'s Wi-Fi sites. SmartPay shares trade infrequently and last changed hands on December 9 at 2 cents. They've dropped about 40% this year.

Scott Technology (SCT): The manufacturer of factory production lines won a $7 million order from a "major high end" European appliance manufacturer this week and the company is continuing to field enquiries on a weekly basis, Chairman Stuart McLauchlan told shareholders at their annual meeting yesterday. The shares fell 2.9% to $1.02 yesterday and have climbed 5% in the past month.

By Jonathan Underhill

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