Stocks to watch: Contact, NZO, Nuplex, Pike River

Monday 25th January 2010

Two key themes are likely to impact on the NZ sharemarket this week: One is what is happening overseas as there is some nervousness about the US and Chinese economies. The second is the OCR announcement on Thursday. Others stocks to watch, based on recent news, are AIA, Nuplex and the resource stocks.

Themes of the day: The Reserve Bank releases its latest review of monetary policy on Thursday and while it is expected to keep the official cash rate unchanged at 2.50%, economists are divided on whether it hikes rates in April or June. The New Zealand dollar dipped below 71 US cents on Friday in New York. Shares tumbled on Wall Street on Friday amid concern President Barack Obama’s plan to rein in risk-taking at banks may hurt profits and Google posted earnings that disappointed investors. The Dow Jones Industrial Average fell 2.1%.

Auckland International Airport (AIA's): AIA is rated a ‘hold’ by Goldman Sachs JB Were analyst Marcus Curley, according to the ShareChat website. The airport’s purchase of a 25% stake in North Queensland Airports for $166 million is “an expensive experiment” and equity returns in the next five years may fall short of its target of mid-teens, he said. Culy cut his valuation by 10 cents to $2.15 a share. The shares were at $1.88 on Friday.

Contact Energy (CEN): Contact said on Friday that first-half retail electricity sales declined 4.2%. The stock fell 2.6% to $6.

New Zealand Oil & Gas (NZO): Crude oil fell to its lowest level in a month in New York on Friday. Crude for March delivery fell 2% to US$74.55 a barrel on the New York Mercantile Exchange. Still prices are up more than 70% in the past 12 months. The shares fell 1.8% to $1.60. Pan Pacific Petroleum (PPP) fell 4% to 48 cents on Friday. Its stock was halted this morning pending an announcement.

Nuplex Industries (NPX): The specialty chemicals company said on Friday that it made a record first-half profit, lifted its full-year forecast and reinstated its interim dividends. “Trading conditions remain solid through November and December and raw material costs were stable, while our businesses continue to operate at increased levels of efficiency,” managing director John Hirst said. The shares climbed 4.9% to $3.20 on Friday.

Pike River Coal (PRC): The company said on Friday it will begin hydro-mining at its South Island site in the third quarter – three months later than it predicted last August, meaning 120,000-150,000 tonnes of coal production will be deferred. The company has been considering options for additional working capital and will make an announcement in the next few weeks. The shares fell 3.8% to $1.01 on Friday.

Sanford (SAN): A British man has been charged with the theft of 30 tonnes of fish from the company’s Auckland Fish Market. Sanford hired a private investigator to uncover the theft, managing director Eric Barratt said, according to the Dominion Post. The fish was worth $374,000. Sanford shares rose 0.4% to $4.84 on Friday.

Businesswire.co.nz

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