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Stocks to watch: AIA, AFFCO, Fletcher Building

Monday 11th January 2010

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

Themes of the day:  Trading volumes are expected to increase as the country gets back to work from the traditional Christmas/New Year break, after light volumes and a positive start to the trading year on the New Zealand stock exchange last week. 
The Quarterly Survey of Business Opinion from the New Zealand Institute of Economic Research is due out tomorrow morning and November building consents on Thursday.
Offshore markets took an initial knock from US jobs data for October, released Friday, which 85,000 fewer jobs in December, versus expectations of no change.  US Secretary of State Hillary Clinton is in New Zealand and Australia this week.  The New Zealand Herald reports that Prime Minister John Key will use the visit in part to stress the importance of completing the Doha round of world trade talks.  World Trade Organisation director-general Pascal Lamy warned over the weekend that global economic recovery could yet stall as fiscal bubbles created by government bail-out spending in the last 18 months unwind.  The US quarterly reporting season opens this week.

Auckland International Airport Ltd (NZX: AIA ): The country's main international gateway airport operator announced this morning it has bought a 24.55% stake in North Queensland Airports (NQA), the operator of Cairns and Mackay airports in Queensland, Australia for A$132.8m (approximately NZ $166m).  The purchase is intended to increase the flow of Asian tourists to New Zealand and is consistent with AIA's long term strategy to expand beyond its core Auckland operation.  AIA last traded at $2.08.

Fletcher Building Ltd (NZX: FBU ): With strong exposure to the resilient Australian economy, the prospect of rising timber prices and strong New Zealand house price data from Quotable Value released this morning, Fletcher Building fits the mould for Goldman Sachs JB Were's forecasts of likely strong performers in 2010. FBU closed last week at $8.32, up 32 cents since the beginning of the year.  AXA issued a substantial security-holder notice last Friday disclosing it reduced its holding in FBU from 6.23% to 5.15% on Dec. 30.

AFFCO Holdings (NZX: AFF ): The North Island meat processor will be one of several beef exporters waiting for the implementation of globally recognised halal certification after Indonesia stopped accepting the existing New Zealand authorities last year. Last week, Indonesia said a product can only be sold as halal if it has been certified by the country’s highest authority on Islamic affairs. Shares in the AFFCO last traded at 38 cents on Dec. 31.

Delegat's Holdings Ltd (NZX: DGL ): The winemaker hit a 52-week high of $2.77 a share in trading last week, despite difficult trading conditions in 2009 caused by a glut of low quality grapes.  Prospects for a better, smaller vintage in 2010 for the New Zealand wine industry as a whole.

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