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Stocks to watch: New Zealand equity preview

Tuesday 1st July 2008

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

Themes of the day: The benchmark NZX 50 Index fell yesterday to its lowest level in more than three years. Oil reached a new record US$143.67 a barrel, rounding out its biggest quarterly gain in nine years, before easing back to US$140. The Reserve Bank of Australia is expected to leave its key rate unchanged at 7.25% today amid signs that the economy is starting to slow.

Dominion Finance Holdings (DFH): The finance company thatís proposed a moratorium on debenture payments to help alleviate a cash flow squeeze, yesterday suspended payments on its listed capital notes. It also wonít pay interest due on debenture stock at June 30. Dominion Finance stock yesterday fell 4.2% to 11.5 cents.

Hellaby Holdings (HBY): The diversified investor yesterday announced the sale of its BBQ Factory chain to a group led by private equity firm Capital Group. The sale will reduce pretax earnings by NZ$5 million to NZ$40 million, the company said yesterday. Its shares last traded at NZ$1.35, the lowest in at least a decade.

Methven Ltd (MVN): The tapware maker appointed Phil Lough, former CEO of Sealord, as chairman. Shares of the company, which posted a 28% gain in profit last year, have fallen about 13% the past two weeks.

PGG Wrightson (PGW): The rural services company said it may sell shares to raise NZ$75 million to help fund its proposal to acquire a 50% stake in Silver Fern Farms, the meat cooperative formerly known as PPCS, for NZ$220 million. The shares fell about 7% to NZ$1.35 yesterday.

Pike River Coal (PRC): The coal miner whose stock has doubled in the past year joins the NZX 50 Index today, replacing Hellaby. Entry to the index may boost demand from institutions who oversee index-weighted funds.

By Jonathan Underhill

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