Stocks to watch: New Zealand equity preview

Wednesday 20th August 2008

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 tumbled amid concerns losses at finance firms will continue. The Standard & Poor's 500 Index fell 1.1%. Housing starts in the US fell 11% to an annual 965,000, the lowest in 17 years. Prices of gold and oil rose as the US dollar weakened against the euro.

Air New Zealand (AIR): Virgin Blue yesterday said its Pacific Blue unit in New Zealand would break even by November after losing less than NZ$4 million in the eight months ended June 30. Pacific Blue's debut on domestic routes last year has forced down fares. The stock rose one cent to NZ$1.26 yesterday and has declined 33% this year.

Fletcher Building (FBU): AXA Asia Pacific Holdings and associated interests reduced their holdings in the building products company to 4.8% from 5.2%. Separately, ASB Bank today said sentiment in the New Zealand housing market is picking up though is still at relatively weak levels. The stock has fallen 40% this year. The company last week posted a 3.5% drop in annual profit.

PGG Wrightson (PGW): The rural services company's offer to buy 50% of Silver Fern Farms has "a number of significant positive benefits" for shareholders of the cooperative, according to an independent report on the deal from Grant Samuel. A half stake in the meat processor formerly known as PPCS is worth between $205 million and $225 million, putting Wrightson's $220 million price at the top end of the range, Grant Samuel said. Wrightson yesterday posted an 80% jump in full-year profit.

Tourism Holding (THL): The tourist operator posted a 7% increase in profit on increased sales and a gain on asset sales. Excluding the asset sales, earnings fell 11%. The company predicted "a challenging 12-18 months
for the tourism industry" because of the impact of oil price volatility and the global credit squeeze. The stock has fallen 36% in the past 12 months and was at NZ$1.42 yesterday.

Windflow Technology (WTL): The designer and manufacturer of wind turbines expects cash-flow from orders will be sufficient to cover working capital requirements on future orders, according to a presentation to prospective investors. The stock has gained 10% this year, surging in June after the company announced that generator Mighty River Power placed an order and agreed to buy a 19.95% stake.

By Jonathan Underhill

Comments from our readers

No comments yet