-By Philip Macalister
Wednesday 14th May 2008
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The stocks are New Zealand Oil & Gas and ASX-listed Energy World Corporation. (EWC)
"The growth of both these companies is tied to commodities that are performing extremely strongly," Salvus says.
NZOG provides exposure to the oil, gas and metallurgical coal markets and EWC provides exposure to the LNG market.
"Despite the mounting evidence of a substantial slowdown in the US and the OECD, strong demand growth from non-OECD emerging markets combined with current supply-side constraints lead us to believe that the possibility of a pull back in commodity prices in the near term is relatively low."
Both these stocks were good performers for Salvus in the past month. During that time Salvus;s net asset value rose 5.7% compared to an increase of 6.1% for the benchmark NZX SmallCap Capital Index.
Salvus says although it underperformed in the month its year-to-date performance "is very strong with the NAV outperforming the benchmark by 7.7%."
The other stock to do well in the month was Comvita which showed relative outperformance of 45.6%:
"Comvita outperformed over the month on the back of expectations of a weaker New Zealand dollar as a result of a slowing domestic economy."
The portfolio's laggard was Abano even though there was "no new fundamental news" to effect the stock.
Core holdings as at 9 May 2008:
Abano Healthcare Group 20.0%
New Zealand Oil & Gas 14.1%
Energy World Corporation 14.1%
Wellington Drive Technologies: 6.4%
Hallenstein Glasson 6.3%
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