Stocks to Watch: New Zealand Equity Preview

Tuesday 6th 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: The New Zealand dollar rose on signs investors have more appetite for risk, stoking demand for higher-yielding currencies. The kiwi rose to 58.82 U.S. cents from 58.52 cents yesterday. Stocks on Wall Street fell in late trading, led by declines in phone companies such as Verizon Communications. The Dow Jones Industrial Average fell 1.4%.

Apple Fields Ltd. (APF): The real estate developer whose name reflects its former business as an orchardist said a subsidiary is paying 23% interest on funds owed to St Laurence after defaulting on payment terms while interest to another lender ranges from 16.95% to 18%. The stock last traded on Nov. 24 at 11 cents and has gained more than 20% in the past two years.

Guinness Peat Group (GPG): Coming into the New Year, brokers are sticking by Guinness Peat Group, despite its price more than halving in 2008, according to a Dominion Post survey. First NZ Capital has described the stock as "extremely cheap," while Forsyth Barr recommends investors buy the stock due to its discounted value and offshore asset base. The shares were at NZ$1.03 yesterday, having fallen as low as 89 New Zealand cents in November.

Hallenstein Glasson Holdings (HLG): Sales at clothing stores fell between 10% and 20% last month, according to Paymark. The clothing chain was unchanged at NZ$2.15 yesterday.

Michael Hill International (MHI): The jewellery chain gained from the lowest level in almost five years yesterday, rising 5.9% to 54 cents. Last month the company said retail conditions had been "very challenging" and announced a shift to Australia, generating tax benefits that would lift earnings.

New Zealand Oil & Gas (NZO) The oil company's stock gained 1 cent to NZ$1.28 yesterday as the price of crude oil climbed. Oil for February delivery gained 4.2% to US$48.32 a barrel on the New York Mercantile Exchange amid tensions in the Gaza Strip and Russia dispute with Ukraine over gas supplies.

Warehouse Group (WHS): Retailer Warehouse Group expects its first half results to be similar to last year's, after announcing sales over the last ten weeks were down 2.5% on the same period last year. Chief executive Ian Morrice said he is pleased with the result, given
the current economic climate. The stock has fallen 40% to NZ$3.48 over the last 12 months.

By Jonathan Underhill

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