Stocks to Watch: New Zealand equity preview

Monday 6th October 2008

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

Themes of the day: Stocks on Wall Street fell on Friday even after the House of Representatives approved the US$700 billion rescue, on concern the world's biggest economy may yet slip into recession. Banks in Europe withdrew support for a 35 billion euro bailout of Germany's No. 2 lender Hypo Real Estate Holding AG in a package that was backed by the European Central Bank and the Bundesbank.

A2 Corp. (ATM): A fund associated with US real estate investor Sam Zell acquired a 14% stake in the milk protein company for NZ$5 million. The shares were unchanged at 14 cents on Friday and have declined 36$ this year.

Auckland International Airport (AIA): The nation's busiest gateway is considering raising as much as NZ$130 million of eight-year bonds, a sign of confidence in its ability to tap investors as the credit market chokes. The funds are to be used for general purposes, it said in a statement on Friday. Full details are to be released early this month. The stock fell 2.4% to NZ$2.02 on Friday and has declined 36% in the past 12 months.

Fletcher Building (FBU): The biggest construction firm on the NZX 50 Index said the start of several infrastructure projects was helping buffer the company from a downturn in residential demand. Fletcher "had to focus far more on working capital to generate cash" in declining markets, chief executive Jonathan Ling said, according to Business Day. The shares fell 5% to NZ$6.83 on Friday and have dropped 40% this year.

PGG Wrightson (PGW): The rural services company's shares fell 7.6% to NZ$1.71 on Friday and is down 36% in the past month. The company last week cancelled a share sale and delayed settlement of a half stake in Silver Fern Farms after failing to secure funding for the initial NZ$145 million payment.

Pumpkin Patch (PPL): The children's clothing chain last week said is cutting 30 head office jobs to trim costs jobs at its Auckland head office in anticipation of deteriorating retail activity in its markets. The shares fell 2.3% to NZ$1.30 on Friday and have dropped 50% this year.

Steel & Tube Holdings (STU): The distributor of steel building products on Friday said it hired Grant Samuel & Associates as independent adviser on the offer from OneSteel for the 49.7% of the shares it doesn't already own. The NZ$4 a share proposal values Steel & Tube at NZ$352.8 million. The shares fell 0.5% to NZ$3.78 on Friday.

By Jonathan Underhill

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