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Stocks to watch: AMP NZ Office Trust waits on building data, CEN, ALF, FBU

Thursday 14th 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: Chinese monetary policy and investment intentions are driving investor sentiment globally at present, particularly in the Asia-Pacific region, with Australian stocks hit yesterday by the second move in a week by Chinese monetary authorities to rein in domestic credit growth.
Meanwhile, Chinese interest in the sugar refinery interests of Australian conglomerate CSR and a range of oil and gas plays across the globe are being viewed as signs that China will be actively expanding its international investments in 2010.
In New Zealand, property, construction and infrastructure stocks are likely to attract attention after building consent figures for November are released mid-morning. With global investors returning to a more cautious stance, defensive stocks may be back in vogue after a short burst of enthusiasm for riskier assets.
Westpac McDermott Miller's Employment Confidence Index, released yesterday, showed optimism consolidating about the year ahead. With the labour market traditionally a lagging indicator, the index lends weight to the view that the New Zealand economy has troughed and is in the early stages of a weak recovery. Positive data on the Australian labour market in December is anticipated later today.

Allied Farmers Ltd (NZX: ALF ): After concluding its controversial bail-out of Hanover Finance and United Finance late last year, ALF shares have been trading relatively actively in the early new year, in a tight band around 11.5 cents, yesterday's closing price.

AMP NZ Office Trust (NZX: APT ): The trust is New Zealand's largest commercial property owner, with investments revalued before Christmas at $1.33 billion, a 4.32% reduction over the last six months of last year. After rallying at the end of last year, APT shares have traded between 76 cents and 78 cents this year, closing yesterday at 77 cents;

Contact Energy Ltd (NZX: CEN ): A classic defensive stock that some brokers believe has been oversold after a difficult 2009, CEN shares have risen from $6.08 at the start of trading this year to settle yesterday at $6.30. Contact is expected to be among the early movers to start raising domestic and commercial electricity tariffs as political scrutiny on the sector fades and attention turns to re-establishing retail prices consistent with rates of return required on potential new generation investments, particularly geothermal and thermal peaking plant.

Fletcher Building Ltd (NZX: FBU ): With the steam coming out of projected Chinese growth rates, a more conservative outlook for the Australian economy is likely to emerge, with implications for New Zealand corporates that have significant exposure to the Australian economy, such as Fletcher Building, the largest company by market capitalisation listed on the NZSX. Today's local building consent figures may also have an impact on the stock. FBU shares have rallied since the start of the New Year, rising 45 cents since last trading in 2009 to close yesterday at $8.45.

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