Stocks to watch: Fletcher briefs investors, KIP advances mall

Thursday 5th 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: Stocks rallied on Wall Street and in Europe, led by commodity producers, on speculation Chinese Premier Wen Jiabao will today announce further stimulus measures for the world's third-largest economy. Prices of oil and copper jumped.

The NZX 50 Index rebounded from a five-year low yesterday, led by companies that were hardest hit in the recent slump. Australia's economy unexpectedly contracted 0.5% in the fourth quarter, raising concern about demand in New Zealand's biggest export market.

Fletcher Building (FBU): The nation's biggest construction company yesterday briefed institutional investors as part of a presentation at Goldman Sachs and "spoke a reasonably positive story in the light of a very challenging environment," according to Ricky Ward, fund manager at Tyndall Investment Management. The stock rose 2% to $5.26 yesterday and is down about 10% this year.

Kiwi Income Property Trust (KIP): The nation's largest property trust said stage one of its redevelopment of the Plaza Shopping Centre in Palmerston North will open for business today. The $93 million revamp includes a new foodcourt, new three-storey car parking building and an increase in specialty stores to about 100 from 60 by the time the whole project is finished next year. The trust's units rose 3% to 99 cents yesterday.

Nuplex Industries (NPX): The specialty chemicals maker yesterday gained 5.8% to $1.10, having slumped on the prospects of more capital raising after a breach of its lending covenants. Nuplex's management team "is solid and the business is OK. It's probably worth more than $1.10," said Paul Robertshawe, equities manager at Tower Asset Management. While it has equity-raising risk hanging over it, some people have decided "there's enough bad news in the price."

New Zealand Oil & Gas (NZO): Crude oil rose to a five-week high on China optimism. Crude for April delivery rose 8.7% to US$45.29 a barrel. The shares rose 3 cents to $1.27 yesterday.

NZ Farming Systems Uruguay (NZS): The company soared 11% to 50% yesterday after the price of milk powder rose 16.6% in Fonterra Cooperative Group's latest online auction, the first recorded increase on the trading system. Fonterra GlobalTrade head Kelvin Wickham says it is too early to conclude the auction result is the start of a rebound though supply and dem,and may be coming back into balance. Farming Systems has tumbled 25% this year.

Pike River Coal (PRC): The coal miner rose 1.4% to 73 cents, dropped 10% to 72 cents yesterday, snapping a two-day slide after announcing an offer of shares backed by 30% owner New Zealand Oil & Gas. The funds will bolster working capital after a rock slide disrupted coal production.

By Jonathan Underhill

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