Stocks to watch: New Zealand equity preview

Friday 16th January 2009

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

Themes of the day: The New Zealand dollar traded below 54 US cents for a second day. Crude oil tumbled 11% after the OPEC cartel forecast a drop in demand this year amid the worldwide economic slump. The European Central Bank cut its benchmark rate by 50 basis points to 2% and ECB President Jean-Claude Trichet said rates may fall again in March as the region's economy slides further into recession.

Fisher & Paykel Healthcare (FPH): The manufacturer of respirators and breathing masks gets 80% of its revenue in US dollars and stands to benefit from the weakening kiwi dollar. The company "is going to do exceedingly well this year profit-wise," said Barry Lindsay, research manager at First NZ Capital. The shares rose 4 cents to $3.28 yesterday.

Fletcher Building (FBU): The latest economic data in the US points to an extended slump. Labor Department figures showed initial jobless claims rose to 524,000 last week, seasonally adjusted. A separate report showed producer prices fell 1.9% in December, the fifth straight decline. Shares of Fletcher, which owns the Formica laminates brand, fell 4 cents to $5.85 yesterday.

New Zealand Oil& Gas (NZO): Crude oil for February delivery fell US$4.06 to US$33.22 a barrel on the New York Mercantile Exchange and sank as low as US$33.20 a barrel, a four-week low. Crude oil demand will fall by 1.4 million barrels, or 4.2%, to 29.5 million barrels, OPEC said in a report. The assessment is for sales from its members. The shares fell 1 cent to $1.23 yesterday.

Telecom (TEL): New Zealand's largest phone company and rival Vodafone offered to cut fees for services such as mobile-to-mobile voice termination, fixed-to-mobile voice termination and short-message-service termination in an attempt to prevent the government imposing regulation.
Telecom fell 13 cents to $2.35 yesterday.

Tourism Holdings (THL): Inbound tourism could fall by 45,000 this year amid the global recession, according to Shamubeel Eaqub, economist at Goldman Sachs JBWere. The estimate was probably accurate, Tourism New Zealand chief George Hickton told the Dominion Post.

Shares of the nation's biggest campervan operator rose 1 cent to 71 cents yesterday and have dropped more than 60% in the past 12 months.

By Jonathan Underhill

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