Stocks to watch: New Zealand equity preview

Friday 3rd October 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 extended their declines worldwide, with Dow Jones Industrial Average dropping 3% amid concern a US financial rescue package won't be enough to prevent weakening world growth. The US Senate approved the tweaked US$700 billion financial rescue package with sweeteners added to help garner support in the House of Representatives, which sank the earlier version and is set to vote Friday in the US.

Austral Pacific Energy (APX): Peter Loretto, an associate of Canada's Trans Orient Energy, reduced his holding in the company to 5.5% from 13.6%, according to a filing to the NZX. Last month, Austral said that in light of its low stock price it had hired McDouall Stuart as adviser for a review of strategic alternatives such as investments, asset sales and merger proposals. The stock was unchanged at 36 cents yesterday and has slumped 80% this year.

Fisher & Paykel Appliances Holdings (FPA): The appliance maker said its Fisher & Paykel Finance unit secured new funding facilities from a syndicate led by ANZ Bank worth a total of NZ$335 million. Chief executive John Bongard said the facilities are "a vote of confidence" from the banks. At the same time, reinvestment rates by its retails investors has averaged 65% over the past three months and was 70% in September, he said. The shares rose 2.4% to NZ$1.70 yesterday and have tumbled more than 50% this year.

New Zealand Oil & Gas (NZO): Crude oil for November delivery fell 4.6% to US$94 a barrel on the New York Mercantile Exchange and has retreated from the record $147.27 reached on July 11. The stock fell one cent to NZ$1.33 yesterday and has declined 15% in the past month.

OceanaGold Corp. (OGC): The gold miner's shares fell 9% to 50 cents yesterday, bringing is three-month slide to 61%. Gold for December delivery fell 5% to $843.20 an ounce in New York overnight.

RLV No. 3 (RLV): Directors of the shell company, set up as a vehicle to provide an efficient stock market listing for a private company, said they are in talks with third parties about a potential iron ore investment in South America. RLV No. 3 has entered into a conditional agreement with an investor to raise up to US$25 million via the issue of up to 200 million shares at 12.5 cents apiece. The transaction must be completed by December 20. Shares of RLV, which is short for reverse listing vehicle, last traded at 1 cent on July 25.

Telecom (TEL): The biggest company of the NZX 50 Index may have to raise more long-term debt funding next year to help pay for the introduction of a high-speed mobile network, chief financial officer Russ Houlden said at the annual meeting yesterday. The stock rose 4.6% to NZ$2.95 yesterday and has fallen 35% this year.

By Jonathan Underhill

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