Stocks to watch: New Zealand equity preview

Wednesday 6th August 2008

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

Themes of the day: Crude oil fell $2.81 to a three-month low $118.60 a barrel in New York. Australia's central bank yesterday indicated it may cut borrowing costs in New Zealand's largest export market as slowing economic growth quells inflation. There is "scope to move towards a less restrictive stance," Governor Glen Stevens said. The New Zealand dollar rose against the Australian dollar to 79.30 Australian cents.

Auckland International Airport (AIA): Macquarie Group entities lifted their combined holding in the airport company to 5% from 4.98%, according to a statement today. The shares fell 2% to NZ$1.92 yesterday and have declined 34% this year.

CDL Investments New Zealand (CDI): The property developer and investor today posted an 80% slump in first-half operating profit after tax to $1.48 million, citing "turbulent conditions." The shares fell to a four-year low 29 cents yesterday and have declined 29% this year.

Dominion Finance Holdings (DFH): The shares will resume trading today after being suspended for almost a month. NZX Regulation halted trading of the stock last month after the firm failed to file its annual report on time. DFH has argued it can't complete its report because of plans to recapitalize its business after suspending debenture payments. The stock tumbled 90% this year up until July 8.

New Zealand Oil & Gas (NZO): Crude oil futures extended their decline, reaching a three-month low of US$118.60 a barrel in New York yesterday. The stock fell 4.8% to NZ$1.57, trimming its advance this year to 36%. NZOG last week said annual revenue soared to NZ$234.6 million from NZ$4.2 million on its share of production from the Tui oil field.

NZX (NZX): The stock exchange operator yesterday said total value of trades fell 17% in July to $2.81 billion, while the total number of trades rose 6% to 54,432. The stock rose 0.9% to NZ$7.72 yesterday and has gained 5% in the past month.

OceanaGold Corp. (OGC): Shares of mining companies including BHP Billiton Ltd. have tumbled by an "absurd" amount and are now worth buying Graham Birch, manager of the $13 billion BGF-World Mining Fund, told Bloomberg News. The discount in mining stocks implies a "very, very sharp slowdown in world economic growth," he said. OceanaGold shares fell 5% to 95 cents yesterday and have declined 24% in the past month.

By Jonathan Underhill

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