Friday 25th July 2008
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Themes of the day: US stocks dropped after figures showed home sales in the world's biggest economy fell to the lowest in a decade last month. Sales of previously owned homes fell 2.6% and the median price fell 6.1% from the same month last year. Lehman Brothers said the New Zealand dollar could fall 14% to about 64 US cents by year-end as the Reserve Bank cuts interest rates, Bloomberg News reported. The Kiwi is Lehman's most disliked currency, the report said.
Cavotec MSL Holdings (CCC): The maker of power supply systems said its order book jumped 8.7% to 44.4 million pounds sterling as at June 30 from a year earlier. The increase brings its order intake in the past 12 months to 135.7 million pounds, a 5.9% increase, the company said in its second-quarter report. It has "showed signs of continued resilience against current global economic trends," Cavotec said.
Fisher & Paykel Healthcare (FPH) and Fisher & Paykel Appliances: The New Zealand dollar tumbled yesterday after the central bank cut interest rates and indicated more reductions in borrowing costs are to come, helping lift sentiment for companies that derive revenue in US dollars. F&P Healthcare jumped 6.5% yesterday and the appliances company, which has relocated plants offshore to reduce the impact of a crippling high kiwi dollar, rose 5.5%. Bank of New Zealand currency strategist Danica Hampton said the kiwi may fall to 70 US cents by year end.
Fletcher Building (FBU): Sales of previously owned homes in the US, where the company's Formica laminates unit is based, fell to a 4.86 million annual pace in June, down from 4.99 in the previous month, according to the National Association of Realtors. The stock jumped 5.5% to NZ$6.91 yesterday, after the Reserve Bank of New Zealand cut interest rates.
Rakon (RAK): The maker of components for global positioning systems told the New Zealand Shareholders Association that volumes of positioning products are still strong and the company "maintains technology and market leadership." The stock jumped 6% to NZ$2.75 yesterday, trimming its decline in the past month to 13%.
Steel & Tube Holdings (STU): The maker of reinforcing steel used for construction gained 3.9% yesterday after the central bank cut interest rates and said more cuts are pending. Lower borrowing costs may help revive demand in the construction industry and stoke sales of the company's products. The shares have fallen 28% this year.
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