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Stocks to watch: Xero eyes US, NZX trading light in 2009

Wednesday 6th January 2010

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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: The first globalDairyTrade auction of the year saw milk powder prices fall 7% after five months in which prices had risen 95%, and reflects greater market balance although demand continues to strengthen, says New Zealand's global dairy company, Fonterra. After an initial upward burst, international stock and commodity prices stalled in overnight trading. A spate of interim reports hit the NZX yesterday. Light trading volumes are likely again today.

Methven (MVN): The tap and bathroomware exporter says in its interim report that it tested for impairment in non-current intangible assets, specifically looking at the potential impact of the global economic recession on its UK operations. No impairments were indicated as at September 30, 2009. The company remains confident that its refocused export strategy, especially in energy efficient retro-fitting of hotel bathrooms, is on track. MVN traded last at %1.65.

New Zealand Experience (NZE): The theme park operator has confirmed a 24 year renewal on leases for its Rainbow's End attraction in Manukau City, although it will be required to give up some of the Manukau City Council-owned land. The lease requires $3 million expenditure on upgrades every three years until 2027. NZE shares traded last at 24 cents.

NZX (NZX): Operational metrics for the 2009 calendar year show that, despite record capital-raising of $7.28 billion, the total volume and value of trading was at a five year low, reflecting investor caution as the global economic recession ground its way through the year. Trades on the NZX’s three platforms – NZSX, NZDX, and NZAX – totalled 575,213 for the year, worth a total of $24.79 billion, down 3% and 12% respectively on 2008 totals. Real-time data terminal subscribers fell 27% over the year to 7272. NZX last traded at $2.36 a share, following the 3:1 share split undertaken last month.

Renaissance Corporation (RSN): The troubled computer reseller announced the appointment of a new chief executive, Richard Webb, effective January 11, to replace Paul Johnston, who left the company after six years late in 2009, citing the unsatisfactory recent performance of the business. Webb joins the company after a varied career in the IT industry in Australia, most recently as chairman and founder of Red Ocean, an incubator for interactive start-ups. Renaissance has also invited Murray Wood, a substantial shareholder, to join the board. Wood is the founder of MagnumMac, the largest independent Apple Reseller in New Zealand which was acquired by Renaissance in 2007. A replacement has yet to be announced for finance director Clive Lewis, who leaves the company on January 15 and whose resignation was announced with Johnston's. Renaissance shares last traded at 22 cents.

Xero (XRO): The would-be global on-line accounting system vendor says in its interim report that paying customer numbers doubled between March and September last year to 12,000, and that it is adding 1000 new customers a month. The company will launch a personal version of the Xero package in partnership with the BNZ early this year, and says uptake in the UK and Australian markets is growing as country managers target accounting firms. Preparations are under way to enter the hugely competitive US market, and Xero "will be taking care to ensure the strategy for entry is the right one". Xero last traded at $1.62.

Businesswire.co.nz



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