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Stocks to watch: New Zealand equity preview

Thursday 7th August 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: New Zealand's dollar has declined almost 1 US cent in the past 24 hours and fell below 71.80 cents overnight. On Wall Street, the Standard & Poor's 500 Index has its biggest gain in four months. Brent crude oil reached as low as US$115.60 in London, extending its decline down from a record high US$147.50. Government figures today may show the jobless rate rose to 3.8% in the second quarter, underlining the weakening economy.

Botry-Zen (BOZ): The developer of biological control agents yesterday said it had production glitches which could result in the failure to meet targets set with Bank of New Zealand and potential subscribers to its convertible notes and options. If the problems can't be overcome there would be "a consequential adverse effect on the company's cash flow," it said. The stock was last at 3.5 cents and has dropped 11% this year.

Contact Energy (CEN): The biggest utility on the NZX 50 last month agreed to buy more natural gas from the Pohokura gas field starting in 2012. Reserves at the field are higher than previously assessed at 978 billion cubic feet, according to the Ministry of Economic Development's latest energy data file. The stock rose 2% to NZ$8.53 yesterday and has gained 9% in the past month.

Fisher & Paykel Appliances Holdings (FPA): New Zealand's dollar has extended its decline to below 72 US cents, swelling the returns of exporters when they bring home their sales. The manufacturer has closed plants in New Zealand and relocated to cheaper centres or to be nearer key markets. The stock has gained 8% in the past month. Over a two-year period, it has slumped 55%.

New Zealand Oil & Gas (NZO): Crude oil futures extended their decline amid speculation slowing global growth will sap demand for fuel and as the US dollar gained. The stock fell 1.3% to NZ$1.55. NZOG last week said annual revenue soared to NZ$234.6 million from NZ$4.2 million on its share of production from the Tui oil field.

OceanaGold Corp. (OGC), Heritage Gold NZ (HGD): Gold fell for a fourth day, with the December contract reaching $883 an ounce on the Comex division of the New York Mercantile Exchange. It reached a record $1,033.90 an ounce in March. OceanaGold yesterday had its second consecutive daily drop of about 5%, reaching 90 cents. Heritage rose to 3.7 cents from 3.5 cents.

Telecom (TEL): The biggest company on the NZX 50 Index may tomorrow post annual profit of NZ$707 million, at the low end of the company's $700 million to $730 million guidance, according to Citi Investment Research, the Dominion Post reported. The shares rose 8% in the past month to trade at NZ$3.68 yesterday.

By Jonathan Underhill

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