Wednesday 17th December 2008
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Themes of the day: The Federal Open Market Committee lowered its target range for the federal funds rate to between 0 to 0.25%, more than most economists had expected, driving up stocks and weakening the dollar against the euro and yen. The Dow Jones Industrial Average surged more than 4% and the US dollar weakened to below 90 yen. New Zealand's dollar advanced to 57.66 US dollar.
Cynotech Holdings (CYT): The finance company that has stock market veteran Allan Hawkins as chairman expects to make a "reasonable" increase in profit from last year's $1.8 million, shareholders were told at a special meeting yesterday. The company is "well and truly battened down and we intend to keep it like this until we see clear evidence of macro economic improvement," he said. The stock last traded at 16 cents on Dec. 10 and has fallen about 25% this year.
Fletcher Building (FBU): The owner of the US-based Formica laminates business may benefit from record low interest rates in the world's biggest economy, which has the potential to halt that nation's property slump. The shares rose to $5.93 yesterday and has gained 5% in the past month.
Telecom Corp. (TEL): The nation's biggest phone company may benefit as the Fed rate cut and rally on Wall Street helps lift sentiment for the domestic equity market. The shares were at $2.40 yesterday, when Moody's Investors Service said it may cut the company's debt ratings. They have fallen 45% this year.
Telstra Corp. (TLS): The New Zealand shares of Australia's biggest phone company fell 10% to $4.15 yesterday after brokerages including Macquarie Group and Goldman Sachs cut their ratings on the stock, after the Australian government yesterday rejected Telstra's bid to build a nationwide high-speed Internet network.
Tourism Holdings (THL): The tourist operator said it has a conditional agreement to sell its 49% shareholdings in InterCity Holdings Limited for $9.5 million to its joint venture partners. The company said it will book a loss on the sale of $3.7 million, which will be included in the results for the six months ended Dec. 31. The stock rose 1 cents to 61 cents yesterday and has slumped almost 75% this year.
Warehouse Group (WHS): Eftpos sales for the first two weeks of December rose 1.7% from the same period in 2007, according to Paymark. Figures yesterday showed New Zealanders spent $1.76 billion on the company's eftpos network, the nation's largest. The number of transactions climbed 6.7% to 33 million. Warehouse rose 5% to $3.42 yesterday and has fallen 44% this year.
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