Stocks to watch: New Zealand equity preview

Tuesday 9th 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: Stocks on Wall Street rallied on President-elect Barack Obama's plan to embark on a massive program of public works to help revive the world's biggest economy and on progress on a bailout package for automakers. Crude oil jumped 7% as commodities rallied on Obama's plan.

Air New Zealand (AIR): Qantas Airways said there are "significant matters" to be resolved before any merger with British Airways can be achieved. These include an appropriate merger ratio, resolution of issues around BA's pension fund and the economic outlook, Chief Executive Officer Alan Joyce said yesterday. Air New Zealand traded unchanged yesterday at 86 cents and has dropped 55% this year.

Fletcher Building (FBU): Shares of the construction company that owns the US based Formica brand of laminated building board fell to near a 4-year low $5.38. The company may benefit if Obama's plan helps restore confidence in the US economy.

Kiwi Income Property Trust (KIP): The property investor said its redevelopment of The Plaza Shopping Centre in Palmerston North is on track with stage one due to open in March next year. Stage one of the retail project is now 94% leased. The $93 million redevelopment and expansion of The Plaza was announced in February. The trust's units fell about 1% to $1.03 and have fallen 22% this year.

New Zealand Oil & Gas (NZO): Crude oil for January delivery rose US$2.85 to US$43.66 a barrel in New York. The oil and gas company's shares fell 2 cents to $1.22 yesterday and are up about 10% this year.

Restaurant Brands New Zealand (RBD): The fast-food chain said sales rose 0.8% in the 12 weeks ended Dec. 1, while same-store sales increased 1.1%. The stock traded at 59 cents yesterday and is down 36% this year, marginally worse then the NZX 50 Index's 34% drop.

Telecom (TEL): The cost of subsiding uneconomic residential phone lines was $70.7 million in the year ended June 30, according to the Commerce Commission. The bulk of the cost is met by Telecom with most of the rest coming from Vodafone and TelstraClear. The final cost estimate compares with an initial draft calculation of $62.8m for 2006/07. The increase reflects Telecom's reduced net revenues, the commission said. Telecom shares were unchanged yesterday at $2.32 and have declined 46% this year.

By Jonathan Underhill

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