Stocks to watch: New Zealand equity preview

Monday 21st July 2008

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

Themes of the day: Wall Street had its best week in six, which may lift sentiment in the domestic market. Electronic card transaction data for June is out at 10:45 a.m. this morning, which may provide further evidence of weakening consumer spending. Also out this morning, migration figures for June, which may show slowing short-term travel arrivals, according to Goldman Sachs JBWere. Oil has continued its retreat, falling to below US$129 a barrel in New York on Friday.

Air New Zealand (AIR), Tourism Holdings (THL): Figures today may show a decline in visitor arrivals in June from a year earlier. Goldman Sachs JBWere is forecasting a 4.5% decline. Tourism Holdings last month cut its profit forecast, citing reduced international arrivals to New Zealand and lower than anticipated levels of travel booked for the winter period. The stock has fallen 43% this year.

Briscoe Group (BGR), Hallenstein Glasson Holdings (HLG), Michael Hill International (MHI), Postie Plus Group (PPG), Pumpkin Patch (PPL), Smiths City Group (SCY), Warehouse Group (WHS): Figures today may show a decline in eftpos and credit card transactions in June, providing further evidence of weakening consumer spending. Warehouse, the largest retailer on the NZX 50 Index, has dropped 33% this year, outpacing the benchmark's 23% slide.

Canterbury Building Society (CBS): The South Island finance firm that acquired Loan & Building Society in February is ex-dividend today, meaning investors who buy the stock aren't entitled to its 8 cents a share payment.

Fletcher Building (FBU): The biggest construction firm on the NZX 50 Index is under pressure to relocate to Australia and make the ASX its primary listing, chief executive Jonathan Ling said, according to the Dominion Post. A slump in the company's stock has made it a potential target for rivals such as Boral Ltd. The stock fell as low as NZ$5.98 last week.

OceanaGold Corp. (OGC), Heritage Gold NZ (HGD): Gold for August delivery fell 1.3%, to $958 an ounce on the New York Mercantile Exchange on Friday. Silver for September delivery fell 2.9% to $18.20 an ounce.

Steel & Tube Holdings (STU): House prices fell 0.6% in the first quarter, according to an index from government valuer Quotable Value New Zealand. Chief executive Nick Calavrias, in announcing a 42% drop in first-half profit back in February, cited a declined in home construction and less immigration. He forecast no profit growth for the second half.

By Jonathan Underhill

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