Stocks to watch: Auckland Airport, NZOG, Smiths City

Tuesday 7th July 2009

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

Themes of the day: The New Zealand Institute of Economic Research releases its Quarter Survey of Business Opinion today, which may provide clues to the outlook for earnings. Also today, the Reserve Bank of Australia is due to release its review of monetary policy and is expected to keep its benchmark interest rate unchanged at 3%. The kiwi dollar climbed to 63.65 U.S. cents and crude oil tumbled.

Auckland International Airport (AIA): The country’s biggest gateway sank 3.2% to a six-year low of $1.51 yesterday after announcing it will cut international landing fees by 5% and abandon plans to raise domestic charges as the global downturn in demand for air travel erodes airline profits. Air New Zealand (AIR) dropped 3.3% to 87 cents, the lowest close since March 12.

Canterbury Building Society (CBS): The South Island mortgage lender said it expects a “testing environment” through 20089-2010 though it also anticipates improving cost of funds and a maturing fixed interest hedging portfolio. The building society forecasts a return to “normalized” profitability in the year ending March 2011, it said in its annual report. The shares last traded on July 6 at $3.15 on the NZAX market and has dropped 21% this year.

Lion Nathan (LNN): The second-largest brewer of beer in Australia begins consultations with employees in Canterbury today as it looks to consolidate production at its manufacturing and warehousing plant in East Tamaki, which is under construction. The brewer, which the Australian consumer watchdog cleared for takeover by Japanese beverage company Kirin Holdings, expects to save between $12 million and $15 million per year from improved technology and consolidated operations. The shares gained 0.1% to $14.65 on the NZX 50 index yesterday.

Methven (MVN): The manufacturer of taps and bathroom fittings fell 3.7% to $1.30 yesterday, leading the NZX 50 lower, after saying it faces prosecution by the Commerce Commission after a competitor laid a complaint about advertising claims over its Satinjet twin jet showerware technology.

New Zealand Oil & Gas (NZO): Crude oil tumbled to a five-week low in New York on concern the global economy will remain weak for longer, curbing demand for fuel. Crude for August delivery fell 4.1% to US$64.03 a barrel on the New York Mercantile Exchange. The price of crude has surged more than 40% this year. The shares were unchanged at $1.55 yesterday.

Smiths City Group (SCY): Brokerage McDouall Stuart values the Christchurch-based retailer at 40 cents and forecasts profit will rise to $1.3 million this year, from $1 million in the year through April, according to the ShareChat website. McDouall Stuart rates the stock a ‘hold’ and said its current share price reflects difficult trading conditions and higher costs. The shares fell 2 cents to 32 cents yesterday.

Businesswire.co.nz

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