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Stocks to watch: New Zealand equity preview

Wednesday 12th November 2008

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The following stocks may be active on the New Zealand exchange after developments since the close of trading yesterday.

Themes of the day: Shares on Wall Street extended their slide, with General Motors leading the Dow Jones Industrial Average lower on concern it is lurching toward bankruptcy. The New Zealand dollar weakened to 57.30 US cents and fell to 56 yen. The Reserve Bank today said the nation's lenders and their Australian parents are "well positioned to withstand the economic downturn." The benchmark NZX 50 Index has declined about 30% this year.

Fisher & Paykel Appliances (FPA): The maker of fridges, freezers, ovens and washers reports first-half earnings on November 13. In the last full year, a high New Zealand dollar concealed local currency sales growth. Since then, the kiwi has dropped 27% against the US dollar but the company said in August it may post a loss of up to NZ$10 million on costs of new plants overseas and falling demand. The stock fell 4.2% to $1.36 yesterday, to be almost 60% lower this year.

Fisher & Paykel Healthcare (FPH): By contrast to FPA, the healthcare company has said profit has been lifted by the weakening New Zealand dollar. It is due to report earnings on November 20. The stock, which bottomed out in June, gained 3.6% to $3.19 today and is up 17% in the past six months.

Goodman Property Trust (GMT): Commonwealth Bank and associated entities today disclosed a 5% holding in the property investor. The stocks traded unchanged at $1.04 yesterday and has slipped 28% in the past 12 months.

NZX (NZX): The manager of New Zealand's bourse said it will do without a head of market supervision until the end of February after acting head Simon McArley's concluded a six month contract. The two business team leaders beneath him will report directly to chief executive Mark Weldon until then, a period that's typically light on regulatory activity, NZX said. The stock was unchanged at $6.05 yesterday and has fallen 32% this year, marginally underperforming its benchmark index.

Pike River Coal (PRC): The miner of coking coal was the biggest decliner of the NZX 50 yesterday, falling 9.7% to NZ$1.02 amid falling commodity prices and signs that demand for coking coal from steel mills is waning. The shares are little changed this year, having topped $2.40 in June. Pike already has contracts to sell some of the coal at well above current market prices.

By Jonathan Underhill

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