Stocks to watch: New Zealand equity preview

Tuesday 2nd 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 tumbled after Federal Reserve Chairman Ben Bernanke said the world’s biggest economy will probably stay weak and he has limited scope to cut interest rates further. In New Zealand, economists have increased their predictions for a central bank rate cut this week, which may be as big as 150 basis points.

Apple Fields (APF): The company posted a full year loss of $1.58 million, reflecting a writedown of sections at its Akaroa project and a dispute over its residential development in the Christchurch suburb of Yaldhurst. Apple Fields posted a profit of $1.24 million last year. The stock last traded at 11 cents on Nov. 24 and is up almost 40% this year.

Dorchester Pacific (DPC): The finance company’s stock slumped 50% to 10 cents yesterday after it posted a first-half loss of $35 million, reflecting a write-off of its stake in ailing finance company St Laurence and an impairment charge against assets. Dorchester needs support from investors for a deferred repayment plan if it is to avoid being placed in receivership.

New Zealand Oil & Gas (NZO): OPEC delayed a decision on whether to cut output to give itself time to assess the impact of its 1.5 million-barrel-a-day output cut agreed to in October. Crude oil for January delivery fell 8.6 percent to US$49.73 a barrel on the New York Mercantile Exchange. The stock traded at $1.30 yesterday.

Pike River Coal (PRC): The coal miner yesterday fell 2% to 98 cents amid signs that coking coal prices will fall as demand from steelmakers abates. Prices may fall to US$200 a metric ton in the year starting April 1, from US$300 a ton this year, according to a Bloomberg survey of analysts.

Telecom (TEL): Privately-held Pacnet is offering $US420 million for Telecom’s AAPT unit to build up its Asia-wide network, according to media reports. Telecom bought AAPT in 1999 and has since slashed its value to just $270 million. The shares fell 16 cents to $2.33 yesterday and are down more than 45% this year.

TrustPower (TPW): the utility said its offer of unsecured subordinated 2015 bonds closed early after being fully subscribed. The Company said it is very pleased with the investor response and the company continues to have a solid funding position to support future growth. The stock was at $6.80 yesterday and has fallen 22% this year.

By Jonathan Underhill

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