Stocks to watch: Fletcher Building, Tower bond sale

Thursday 12th March 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 climbed above 51 US cents, and gained against the yen, Australian dollar and euro, after the central bank cut the official cash rate to 3% as expected and said the economy will like hit bottom by mid-year, limiting the scope further interest rate cuts.

Shares on Wall Street pared their gains as falling prices for oil and metals weighed on energy companies and metal processors. UBS AG, the world's largest wealth manager, revised its 2008 net loss to 20.9 billion Swiss francs, the biggest in Swiss history, from 19.7 billion francs reflecting additional writedowns and a tax fine in the US

AMP (AMP): Australia's biggest provider of pension plans was the biggest gainer on the NBZX 50 Index yesterday, rising 6% to $5.20 after Citigroup's upbeat comments helped financials and insurers rally worldwide.

Fletcher Building (FBU): Shares of the nation's largest construction company may gain after the central bank lowered its key interest rate, opening the door for lower mortgage costs that may stoke the housing market. The stock rose 2% to $5.26 yesterday.

L&M Petroleum (LMP): The oil explorer posted a full-year loss of $5.7 million, reflecting costs to probe reserves of oil, gas and coal seam gas in Taranaki and around the South Island. L&M's 32.5% owned Fireball Creek-1 well was plugged and abandoned. Its Goodwin-1 coal seam gas well showed 11 metres of coals with methane gas of 4.42 cubic metres per tonne. The stock last traded unchanged at 8.6 cents yesterday.

Metlifecare (MET): Chairman Jim McLay will resign after Foreign Minister Murray McCully named the former prime minister as New Zealand's next Permanent Representative to the United Nations. Its shares trade infrequently, and were last at $1.59, having slumped almost 70% in the last 12 months. McLay will also resign as chairman of Goodman Property Trust (GMT), which rose 1.2% to 86 cents yesterday.

New Zealand Oil & Gas (NZO): Crude oil fell 7% in New York after US Energy Department figures showed inventories climbed by a larger-than-expected 700,000 barrels last week and China's imports declined. US crude fell as low as US$42 a barrel and was recently at US$42.33. The shares rose 1 cent to $1.42 yesterday.

Pyne Gould Corp. (PGC): The rural finance company which is seeking to transform itself into a bank said its MARAC and Perpetual Trust units, which will form the core of the new lender, have "turned in solid performances at the operating level." Chairman Sam Maling said in the company's Viewpoint newsletter that the two units would continue to achieve operating profitability in the full-year. The shares rose about 2% to $1.55.

Restaurant Brands NZ (RBD): The fast-food franchise holder today said same-store sales rose 3.9% in the fourth quarter, with total revenue in the 13 weeks ended March 2 climbing 1.5% to US$77.2 million. Sales growth was led by a 4.3% gain at KFC, while Pizza Hut sales declined 4.8%. Starbucks revenue fell 2.7%.
Tower (TWR): The insurer and funds manager said its underlying strengths help to serve it well in a slowing economy, according to the prospectus for the company's sale of $100 million of 8.5% bonds. The shares were last at $1.35 and have fallen 8% in the past three months, about matching the NZX 50.

Warehouse Group (WHS): The biggest retailer on the NZX 50 today said first-half profit fell to $49 million from $64.3 million a year earlier. The results included a $7.4 million charge to exit from fresh food and liquor sales. Group revenue fell 2.9% to $923.5 million and the company held its first-half dividend unchanged at 15.5 cents per share.

By Jonathan Underhill

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