Stocks to watch: Fletcher profit tumbles, crude oil slides

Thursday 12th 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: Fletcher Building posted a 27% slump in first-half profit, saying it would focus on cost cutting as demand dwindles. It kept its dividend unchanged and said its balance sheet is strong enough to cope with the downturn. Reserve Bank Deputy Governor Grant Spencer said in an interview with the Business Spectator website that the nation's exposure to Australia and Asia means the economy is well placed to weather the downturn. Crude oil fell 3.4% to US$36.29 a barrel in New York after Energy Department figures showed higher-than-expected stockpiles.

Fisher & Paykel Appliances (FPA): The stock fell 3.6% to a record low $1.08 yesterday extending their slide since Whirlpool Corp., the world's biggest appliances maker and its distribution and technology partner, posted a slump in earnings and said the global slowdown "had a significant impact on consumer demand in all parts of the world."

Fletcher Building (FBU): The country's largest construction company reported earnings fell to $172 million in the six months ended December 31 and chief executive Jonathan Ling said the company faces "extremely tough trading conditions in most of our key markets." The company held its dividend unchanged at 24 cents. The stock rose 1% to $5.50 yesterday, having tumbled almost 40% in the past 12 months.

Michael Hill International (MHI): The jewellery chain's shares fell 3.8% to 51 cents, yesterday, leading the NZX 50 lower after the Westpac Banking Corp. and Melbourne Australian consumer sentiment index for January showed confidence sank 4.6% to 85.8 points. Australia is the company's biggest market.

New Zealand Oil & Gas (NZO): The part owner of the Tui oil field fell 2 cents to $1.38 yesterday. A US Energy Department report overnight showed US oil stockpiles rose by a greater-than-expected 4.72 million barrels to 350.8 million barrels in the week ended February 6.

Wool Equities (WEL): Chairman, Dr Andy Pearce yesterday announced that the company's Keratec unit has entered into a new distribution agreement for its personal care products with Croda Europe. Wool Equities last traded at 26 cents on October 16. It had shed almost 50% in the past 12 months.

By Jonathan Underhill

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