Stocks to watch: New Zealand equity preview

Tuesday 3rd February 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 fell below 50 US cents for the first time in six years. It recently traded at 50.51 US cents. Shares were mixed on Wall Street after figures showed consumer spending dropped 1% in December while a separate Commerce Department report showed non-residential construction fell 0.6% and total building dropped 1.4%. Fonterra Cooperative Group is scheduled to hold its next online milk powder auction this week, amid signs of plunging world prices for milk.

Air New Zealand (AIR): The national carrier is suspending its twice-weekly service between Dunedin and Sydney in April and reducing its flights to Brisbane to one a week, the Dominion Post reported. Competition is heating up on the Tasman routes, including Emirates Airbus A380 jumbo service to Auckland. The shares rose 1 cent to 91 cents yesterday.

Austral Pacific Energy (APX): The oil company gained a second time extension to restructure its loan facility with Investec Bank. The extension is to February 28 from the end of last month. In November chief executive Thom Jewell said Austral's operating performance was "overshadowed by the challenge of refinancing and/or restructuring the loan facility on or before December 15 in the current financial market." The stock last traded on January 28 at 5.5 cents.

Fisher & Paykel Healthcare (FPH): The maker of breathing masks and respirators gets 80% of its revenue in US dollars and gets a benefit when bringing its overseas sales back into a weaker kiwi dollar. The shares rose 2.1% to $3.45 yesterday.

New Image Group (NEW): The producer of colostrum-based natural health products yesterday said revenue and profit in the six months ended December 31 were higher than reported at the October AGM reflecting "continued strong trading," especially in Malaysia direct sales. Revenue jumped to about $40 million from $16 million and profit rose to $5 million from $1.48 million. The company will pay a first-half dividend of 0.5 cent. It also announced plans to buy back as many as 5 million shares this year. The shares fell 7.7% to 18 cents yesterday.

Nuplex Industries (NPX): The resins and specialty chemicals maker tumbled 7.3% to $2.67 yesterday, leading the NZX 50 lower, after saying pretax earnings would be $42.5 million in the first half and similar in the second, down from its November forecasts, on one-time charges and reduced demand in Europe.

NZ Farming Systems Uruguay (NZS): The company set up to export New Zealand's intensive dairy farming techniques to South America said yesterday that it expects an increase in production after rains ended the worst drought in decades. Some 200 millimetres of rain fell across much of Uruguay in the past three or four days, helping replenish pasture, which will lift milk production, chairman Keith Smith said in a statement. The stock traded yesterday unchanged at 58 cents and has dropped 50% in the past three months.

By Jonathan Underhill

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