Stocks to watch: New Zealand equity preview

Monday 12th January 2009

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

Themes of the day: Stocks on Wall Street fell on Friday after figures showed the US economy shed 524,000 jobs in December, bringing the total lost last year to 2.6 million, the worst slump in employment since the end of WWII. Crude oil fell after the non-farm payrolls report.

Fletcher Building (FBU): Manukau City Council may scale back plans for its Flat Bush development that was intended to create a town of 40,000 people because of the economic downturn. Shares of New Zealand's largest construction company jumped 10 cents to $5.98 on Friday.

Michael Hill International (MHI): The jeweler fell 5.3% to 54 cents on Friday after the chairman said profit was "materially below" the previous year's as tough trading conditions forced it to discount while currency movements drove up costs. "Sales targets were difficult to achieve in the tough retail conditions we were facing, especially in New Zealand and Canada," he said.

New Zealand Farming Systems Uruguay (NZS): The company transplanting New Zealand intensive dairy farming techniques to South America has tumbled 42% in the past two months as world process for milk fell and the turmoil in financial markets hampered its efforts to raise funds to expand. The shares fell 1.7% to 59 cents on Friday.

New Zealand Oil & Gas (NZO): Crude oil as the loss of jobs in the US heightened concern demand for fuel will slide even as OPEC reduces production. Crude for February delivery fell 2.1% to US$40.83 a barrel on the New York Mercantile Exchange. The oil company's stock fell a.6% to $1.24 on Friday.

Orion Minerals Group (OMG): The Chilean iron ore producer listed on the NZX via a reverse listing vehicle said Friday that its Hong Kong investor, Fengli, has made part of its investment conditional on due diligence and a minerals report amid declining prices. Some 80 shares of the start-up miner changed hands on Jan. 5 at 24 cents.

Wellington Drive Technologies (WDT): The manufacturer of energy efficient fans and motors was the biggest decliner of the NZX on Friday, tumbling 28% to 13 cents. The company said it planned to raise $11.4 million in a share placement at 10 cents apiece, while forecasting a second year of losses. Sales are expected to surge 150%.

By Jonathan Underhill

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