Stocks to watch: New Zealand equity preview

Monday 2nd February 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 dollar fell to 50.76 US cents, with predictions it could hit 50 cents ahead of government figures this week that may show the jobless rate rose to a five-year high 4.6%. Stocks fell in the US after figures showed the world's biggest economy contracted at an annual pace of 3.8% in the fourth quarter. Fonterra Cooperative Group is scheduled to hold its next online milk powder auction this week, amid signs of plunging world prices for milk.

Air New Zealand (AIR): The national airline's biggest rival, Qantas, had a 160% surge in US sales in the past two weeks, versus the same period a year earlier, AAP reported. The Sydney-based airline offered discount fares and benefited from the G'Day USA festival, according to the report. Air New Zealand's shares fell 2 cents to 90 cents on Friday, after the company cut capacity on long-haul routes to the UK, US and Asia as the global economic slump trimmed demand for travel.

APN News & Media (APN): The Australia-based publisher of the New Zealand Herald tumbled 25 cents to $2.43, leading the NZX 50 lower on Friday after Tony O'Reilly's Independent News abandoned efforts to sell its 39% stake in the media company.

Contact Energy (CEN): The biggest utility on the NZX 50 index has dismissed a claim that competitor TrustPower has secured a better deal to replace its billing system, saying no contract had been finalised. TrustPower is replacing its billing system at a cost of $18 million, and claimed this was less than a similar upgrade by Contact. Contact's board is understood to have approved spending of $80 million to replace its core systems. Its stock rose 2% to $6.87 on Friday.

Infratil (IFT): The investment group today said it agreed a variation to its shareholders' agreement with the City of Luebeck over the company's 90%-owned Luebeck Airport. Under the 2005 agreement, Infratil has the right to force the city, which owns 10% of the airport, if annual passenger numbers were less than 1.2 million last year. Figures showed the number was just 540,000 passengers. Infratil has agreed not to exercise the put option before October 23.

The put option price is 23.5 million euros plus compensation for operating losses and interest. The city has a call option on the same terms. Infratil said no decision has been made. The shares rose 1 cent to $1.77 on Friday.

OceanaGold Corp. (OGC): New Zealand's largest gold mining company has reduced its exploration activities for the short-term, after total expenditure in the fourth quarter was US$1 million, and is investigating an extension to its Macraes Mine near Dunedin. It announced an increase in full-year gold sales of 49% to 264,124 ounces for 2008. Its stock rose 5% to 58 NZ cents on Friday.

Sky Network Television (SKT): The pay-television company's shares rose 1.7% to $4.17 on Friday, extending their month-long rally to 8% on optimism about demand for its My Sky service. British Sky Broadcasting, the UK's biggest pay-TV company, is expanding its own high-definition offering and hiring more workers as profit climbs and analysts believe a similar boost will help Sky Network, according to Barry Lindsay, research manager at First NZ Capital.

By Jonathan Underhill

Comments from our readers

No comments yet