Stocks to watch: Nuplex slump, Lyttelton outlook

Monday 23rd March 2009

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

Themes of the day: Shares on Wall Street fell on Friday, with American International Group slumping 22% and leading the S&P 500 lower as it clashes with Connecticut state officials over bonus payments. The US dollar rounded out its worst week since 1985. The Obama administration is to release details of financial market regulatory changes this week. At home, government figures may show the economy weakened in the fourth quarter while the annual current account gap worsened.

Air New Zealand (AIR): Total passenger numbers fell 9.5% to 967,000 passengers in February from the same month of 2008, spurring the airline to cut capacity by 9.7%. Long-haul passenger numbers tumbled 14%. Air NZ is currently fighting in the High Court against Commerce Commission allegations that it was involved in international price fixing arrangements. The shares fell 2.2% to 88 cents on Friday.

Fisher & Paykel Appliances (FPA): The manufacturer
fell 5% to a record low 37 cents amid concern it may struggle to win over investors, given Nuplex Industries' difficulties, if forced to tap the market for more capital.

Lyttelton Port Co. (LPC): The South Island's biggest port company said in its first-half report that the deteriorating local and global economy will "put volumes in all trades under pressure going forward." It expects annual profit to edge lower to $10 million this year, from $10.3 million in 2008. The shares were unchanged at $2.50 on Friday. It is little changed in the past 12 months, while the NZX 50 dropped 24%.

Nuplex Industries (NPX): The shares tumbled 52% to 51 cents on Friday after the specialty chemicals maker was forced to make a rights offer at a deep discount. Shareholders will be offered the right to buy seven new shares for every one held at 23 cents apiece, raising $132.8 million to repay debt after the company breached its loan covenants.

NZ Farming Systems Uruguay (NZS): The shares rose 11% to 78 cents on Friday, while part-owner PGG Wrightson gained 1.7% to $1.22. Rural Portfolio Investments, the investment vehicle owned by Wrightson chairman Craig Norgate and the family of Baird McConnon, has made arrangements to fund $42.5 million of preference shares that mature in April. RPI owns a controlling stake in Wrightson, which owns NZ farming Systems and reaps a management fee in profitable times.

Tourism Holdings (THL): Tourist numbers tumbled 9%, or about 24,000 last months, according to Statistics New Zealand figures on Friday. The decline in the last 12-month period was 60,000. The stock was unchanged at 48 cents on Friday and has dropped 28% this year.

By Jonathan Underhill

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