Stocks to watch: New Zealand equity preview

Wednesday 21st January 2009

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

Themes of the day: The New Zealand dollar fell below 52 US cents. Stocks tumbled on Wall Street and in Europe, led by banks, on concern lenders will need to find more capital to shore up their balance sheets amid ongoing losses. State Street tumbled 49% to US$18.60, in the biggest slump for 25 years, after the biggest money manager for institutions said unrealized losses on fixed-income securities almost doubled to US$6.3 billion at December 31. Barack Obama became the 44th president of the US, calling on American's to rally together to rebuild the world's largest economy.

Australia & New Zealand Banking Group (ANZ): The Australian lender may decline after bank stocks slumped in the US and the UK ANZ Bank fell 4.4% to $17 on the NZX yesterday while Westpac Banking Corp. fell 4% to $19.

Contact Energy (CEN): The biggest utility on the NZX 50 fell 9.8% to $6.63 yesterday, a record decline for the stock, after chief executive David Baldwin said underlying profit may fall from last year's $237 million as hydro dams in the South Island spill water, the Tiwai Point aluminium smelter reduces output and gas costs rise. The price Contact pays for gas is tied to the producer price index which jumped an annualized 13.6% in the six months ended December 31.

Fisher & Paykel Healthcare (FPH): The manufacturer of respirators and breathing masks gets about 80% of its revenue in US dollars and benefits from a weaker kiwi currency. The kiwi fell to 51.98 US cents today from 54.33 cents yesterday. The stock rose 0.9% to $3.23 yesterday.

PGG Wrightson (PGW): The rural services company fell 7.8% to $1.18 yesterday, its second daily decline after announcing it would shutter its Australian real estate and livestock units because of the tough economic conditions. Wrightson is "relatively highly geared in an environment where that's seen as a risk factor," said Paul Robertshawe, equities manager at Tower Asset Management.

Sky Network Television (SKT): The pay-TV company whose programming and equipment costs are based in US dollars so it typically benefits from a weaker kiwi dollar. The stock rose 1% to $3.89 yesterday.

By Jonathan Underhill

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