Stocks to watch: New Zealand equity preview

Monday 11th August 2008

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

Themes of the day: The New Zealand dollar fell below 70 US cents on Friday, giving some comfort to companies whose export returns have been hammered by a strong currency. Crude oil fell below $115 a barrel for the first time in three months in New York on Friday, leading a drop in commodities as the US dollar rallied against the euro.

Briscoe Group (BGR), Hallenstein Glasson Holdings (HLG), Postie Plus Group (PPG), Warehouse Group (WHS): Government figures on August 15 are expected to show retail sales rose 0.1% in June after sliding 1.2% in the previous month.

Fletcher Building (FBU): Residential property prices fell 2.2% in July, according to Quotable Value, as a weakening economy and higher household costs sapped demand in the housing market. The company posts its full-year earnings on August 13, having forecast a drop in profit in May. Profit may fall as low as NZ$432 million from NZ$484 million last year, according to First NZ Capital.

OceanaGold Corp. (OGC): Gold may decline for the fifth week in a row, according to a Bloomberg survey, reflecting the strengthening US dollar. Twelve of 23 traders, investors and analysts in the survey late last week advised selling gold, 10 said buy and one was neutral, the survey showed. Gold fell 5.7% to $864.80 an ounce last week in New York.

Sky Network Television (SKT): The pay-TV operator's costs, including programming and equipment, are predominantly priced in US dollars, meaning the company benefits when the kiwi is high. New Zealand's dollar dropped below 70 US cents on Friday.

Fisher & Paykel Appliances Holdings (FPA): The manufacturer has closed plants in New Zealand and relocated to sites nearer its market as the high kiwi eroded export returns. The stock has declined 39% this year.

Telecom Corp. (TEL): Shares of the biggest company on the NZX50 Index tumbled 7.6% on Friday after it said profit will decline as much as 30% this year, the second consecutive slide in earnings. The stock has dropped 22% this year, while the benchmark index is down 17%.

By Jonathan Underhill

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