Stocks to watch: Michael Hill profit drop, Diligent

Tuesday 10th March 2009

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

Themes of the day: Shares on Wall Street dropped after
Warren Buffett, chairman of investment group Berkshire Hathaway, told CNBC that the US economy "has fallen off a cliff." His comments follow a World Bank report that predicted the entire global economy will contract this year for the first time since WWII as worldwide trade falls.

Diligent Board Member Services (DIL): The company will report an impairment loss on the $7.2 million balance on a note receivable from its predecessor company. The mark to market exercise reflects "worsening current conditions of the world financial markets and the current market value of the note's collateral." The shares trade infrequently and were last at 15 cents on March 4.

Michael Hill International (MHI): The jewellery chain yesterday posted a 37% drop in first-half pretax earnings as the Australian dollar weakened and the company incurred costs to acquire stores in the US. The company lowered its first-half dividend. The shares were unchanged at 47 cents.

Nuplex Industries (NPX): The company fell 9.5% to 95 cents yesterday, a 17-year low, leading the NZX 50's decline after the specialty chemicals company hired Bancorp NZ, First NZ Capital Securities and accountants McGrath Nicol to help "determine its medium and short term capital needs in the current economic and trading environment." The shares have dropped 65% this year.

Sky Network Television (SKT): The state broadcaster Television New Zealand is negotiating a stake in TiVo, potentially giving the Freeview platform an alternative product to My Sky. It's unclear whether Sky would allow Prime on TiVo, as it has kept the channel off Freeview. MediaWorks insists it knows nothing of the move.

Tourism Holdings (THL): The campervan operator's shares jumped 6.4% to 50 cents, the biggest gain on the NZX 50, having dropped 30% this year. Some 12.5 million viewers in the US tuned watched an episode of The Bachelor set in Queenstown while the final, set in the Bay of Island's lured 15.4 million. Tourism New Zealand is planning to use the publicity in its campaigns to lure more visitors to New Zealand.

Zintel Group (ZIN): The trans-Tasman telecommunications company has appointed Paul Connell as executive director after managing director Peter Revell stepped down due to health issues. Revell joined the board last year, and has been chief executive of the company since 2006. Its stock closed last week at 19 cents.

By Jonathan Underhill

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