Stocks to watch: New Zealand equity preview

Thursday 8th 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 on Wall Street fell on signs the US economy is shedding jobs, Intel Corp. posted weaker-than-expected sales and aluminium producer Alcoa announced plans to cut production and reduce its workforce.

Crude oil sank 12% on bigger than expected growth in US stockpiles. Inventories of oil rose by 6.68 million barrels to 325.4 million barrels last week, according to the US Energy Department.

Contact Energy (CEG): Contact Energy and state-owned Meridian Energy have ruled out price cuts for retail customers as overflowing hydro-lakes in the South Island have seen wholesale prices bottom out to as low as 1 New Zealand cent per megawatt hour. The stock fell to $7.50 and is down 10% in the last 12 months.

Fisher & Paykel Healthcare (FPH): The manufacturer of breathing devices and respirators, which gets more than two third of its revenue in US dollars, fell 3.7% to $3.19 yesterday. The New Zealand dollar is edging back up towards 60 US cents for the first time in more than three weeks.

Guinness Peat Group (GPG): The investment company fell 5.8% to 98 cents yesterday after chairman Ron Brierley said 2008 profit was hurt by the worldwide economic downturn, which eroded earnings and reduced the value of its share portfolio. The downturn may limit GPG's plan to return capital to shareholders in 2010, the company's 20th anniversary.

Infratil (IFT): Scotland's Ayr Advertiser is reporting the New Zealand infrastructure company is refusing to pay around 100,000 pounds for increased policing at its Prestwick Airport in Glasgow after the airport requested additional officers following the 2007 terrorist attack at Glasgow International Airport.

The airport is a popular gateway for visitors to and from Europe travelling on budget airline Ryan Air. Its stock held steady on $1.66, having fallen around 40% in the last year.

New Zealand Farming Systems Uruguay (NZS): The company transplanting New Zealand intensive dairy farming techniques to South America has tumbled more than 60% this year as milk prices retreated from record highs and access to credit waned. The shares were at 60 cents yesterday. Fonterra Cooperative Group said there are signs dairy prices may be bottoming out.

New Zealand Oil & Gas (NZO): The oil and gas exploration company will be monitoring the price of oil, which tumbled 12% due to a big build-up of inventories in the US, paring gains since the start of the year. The company's stock has held steady on $1.28 since January 1.

By Jonathan Underhill

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