Stocks to watch: F&P Healthcare, exporters, Contact

Wednesday 1st April 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 tumbled more than 1 US cents after Reserve Bank Governor Alan Bollard said long-term wholesale interest rates are "out of line" with the bank's expectations, given the economy is expected to recover only gradually.

Stocks rose on Wall Street, led by banks, as a gauge of corporate risk fell. The so-called TED spread, the gap between interest rates on three-month LIBOR and the three-month US Treasury bill, narrowed to below one percentage point. It was higher than 4.5 percentage points before Lehman Brothers collapsed.

Contact Energy (CEN): The largest power company on the NZX 50 yesterday said it bought back just 2.6 million of 11.3 million bonus shares issued under the company's profit distribution plan, keeping $49.1 million in the business. The power company's majority shareholder Origin Energy increased its stake in Contact by 0.06% through the share issue. The shares fell 2.4% to $5.72.

Fisher & Paykel Healthcare (FPH): The New Zealand dollar tumbled more than one US cent and was recently at 55.93 US cents after comments from Bollard that long-term rates are too high. A weaker currency helps lift the value of overseas sales. F&P Healthcare gets 80% of its sales in US dollars.

Goodman Property Trust (GMT): The trust yesterday said the value of its property investments has dropped by 10% amid falling land values. Property values fell by $169 million in the 12 months through March 31 to $1.5 billion. The shares fell 3.6% to 80 cents yesterday.

New Zealand Oil & Gas (NZO): Crude oil for May delivery rose 2.6% to US$49.66 a barrel on the New York Mercantile Exchange and advanced 11% in the first quarter. The stock rose one cent to $1.36 yesterday.

Port of Tauranga (POT): The nation's largest export port said it expects a challenging year and will focus on cost control. Still, the port's business fundamentals "remain strong" and its competitive advantages "are strengthening," chairman John Parker said in the company's first-half report.

By Jonathan Underhill

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