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Stocks to watch: Contact, Freightways, Fletcher Bldg, Air NZ

Tuesday 5th January 2010

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The following stocks may be active on the New Zealand exchange after developments since the close of trading in 2009.

Themes of the day: New Zealand's stock exchange trades for the first time in 2010 today, with stock prices on major world bourses surging overnight on optimism about the strength of both the Chinese and United States economies for 2010. The New Zealand dollar hit a six week high this morning, trading at US73.45 cents. Local broker picks for 2010 are emerging, with defensive and utility stocks a strong theme. Finance company Strategic Finance’s moratorium will be reviewed by its trustee after it failed to make its first repayment to investors.

Air New Zealand Ltd. (NZX: AIR ): The national carrier’s regional cargo manager for the Americas Salvatore Sanfilippo has been added to the growing list of airline executives alleged to be involved in international price fixing, BusinessDay reported. The Commerce Commission alleges several airlines, including Air New Zealand, were involved in fixing prices, each of which face a fine of up to $10 million. Shares in the airline gained 1 cent to $1.21 in the last day of trading for 2009.

Contact Energy Ltd. (NZX: CEN ): Prospects for the largest listed electricity generator-retailer are improving, says Forsyth Barr's head of research Rob Mercer. After a year in which everything that could go wrong did go wrong, Contact is under-valued by as much as 20%. The stock last traded at $6.15.

Fletcher Building Ltd. (NZX: FBU ): Unprecedented demand for pine logs from Asia, especially China, is expected to push the cost of timber for home building in New Zealand up by as much as 10%, exacerbated by reduced lumber production and mill closures that have more than compensated for last year's downturn in the building trade. Fletcher Building last traded at $7.99.

Freightways Ltd. (NZX: FRE ): Tough conditions in the transport industry saw the Christmas Eve liquidation of national freight forwarding firm Rapid Roadfreighters, with the loss of 250 jobs. That may lessen the competition for Freightways, which dipped from a 12 month high to close last at $3.40;

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