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Stocks to watch: New Zealand equity preview

Wednesday 10th December 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: US stocks fell after companies including FedEx Corp. forecast weaker than expected earnings, stoking concern about a prolonged recession in the world’s biggest economy. Crude oil for January delivery fell 1.7% to US$42.96 a barrel on the New York Mercantile Exchange.
     
Air New Zealand (AIR): The airline’s acquisition of a stake in Australian online booking system V3 may increase the amount of tourist packages to New Zealand and demand for airline flights. The stock was unchanged at 85 cents yesterday and has declined 55% this year.
     
Investment Research Group (IRG): The investment adviser posted a first-half loss of $97,000, an improvement from the year-earlier loss of $3.5 million. Sales rose 26% to $1.6 million. Operating profit was $305,000. The results included a write-down of its shares in Dorchester Pacific by $386,000. The shares trade infrequently and were unchanged at 9 cents yesterday.
 
New Zealand Oil & Gas (NZO): The US Energy Department said global oil consumption may decline 0.5% to 85.3 million barrels a day next year. Crude oil for January delivery fell 1.7% to US$42.96 a barrel on the New York Mercantile Exchange. The stock rose 5 cents to $1.27 yesterday and is up 10% this year.
 
Restaurant Brands New Zealand (RBD): The local franchise holder for KFC, Pizza Hut and Starbucks coffee outlets rose 3.4% to 61 cents yesterday after the company posted a 0.8% gain in third-quarter sales. KFC drove sales growth, with revenue from the chicken outlets gaining $2.3 million to $47.9 million.
 
Warehouse Group (WHS): The biggest retailer on the NZX 50 Index said it will close down its liquor sales in six of its 85 red shed stores after the Liquor Licensing Authority declined a licence for its Albany store and after the retailer decided to halt its Warehouse Extra grocery offering. Chief executive Ian Morrice said liquor retailing incurred higher costs because of the need for increased monitoring. Costs to exit liquor would be about $1 million and start after Christmas. The shares rose 4 cents to $3.28 yesterday and are down 43% this year.
   
Westpac Banking Corp. (WBC):
Westpac has successfully completed a A$2.5 billion share placement and has resumed trading on the NZX. The share placement aims to improve the bank's potential for growth and bolster its balance sheet following its merger with St George Bank in Australia. The bank's stock last traded at $21.60 on the NZX, having fallen just over 35% in the last 12 months.

By Jonathan Underhill



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