Stocks to watch: NZX, Warehouse, Air New Zealand

Friday 15th January 2010

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

Themes of the day: Electronic transaction data for December is due this morning from Statistics New Zealand and is expected to confirm a relatively weak Christmas season for retailers, although New Year sales performance may yet offset that. Attention will begin to turn to inflation figures, with the December quarter Consumers' Price and Food Price indices due next Wednesday. Strong employment data was announced in Australia yesterday. Overnight trading in Europe and on Wall Street saw stocks rise slightly, with further signs that neither the Federal Reserve nor the European Central Bank is likely to move quickly to raise interest rates. A report in The Dominion Post newspaper that a key government agricultural policy adviser, Peter Fraser, has been removed from involvement in dairy industry reform suggests political caution is emerging in the government's relationship with the Fonterra cooperative, entrenching current policy settings.

Air New Zealand Ltd. (NZX: AIR ): The national carrier has won the equivalent of an industry Oscar from the influential Transport World magazine, which recognised the airline for its safety record, operational performance, customer and resilience during the global financial crisis, in which it emerged as one of the few global airlines to remain profitable. Improved tourism connections to northern Queensland and Asia are promised by Auckland International Airport's (AIA) announcement this week of its purchase of a quarter stake in the Northern Queensland Airports company, although the deal has not fired the market's imagination as yet. Air New Zealand shares closed unchanged at $1.17 yesterday. AIA shares have drifted down all week since Monday's announcement and closed yesterday at $1.93, from $2.08 a week ago;

NZX Ltd. (NZX: NZX ): Broking house Forsyth Barr is making an "accumulate" recommendation on the New Zealand stock and derivatives exchange operator, according to a report on the Sharechat website. Recent acquisitions would prove a drag on short term profitability, but analyst Guy Hallwright has raised his valuation based on long term value accretion from $2.28 to $2.37 a share. NZX is on track to launch a new dairy derivative contract this year, but faces competition from the ASX in providing a new electricity derivative, as ASX clearinghouse facilities are better prepared. NZX closed yesterday at $2.31;

Warehouse Group (NZX: WHS ): Shares in the national discount retailer closed at a new low for the year at $4.04 yesterday. Electronic data transaction data for December will be watched for confirmation of the strength of Christmas sales;

Widespread Energy Ltd. (NZX: WEN ): The NZAX-listed petroleum mining company announced this morning that it would move a drilling rig onto a site in its onshore West Coast Kotuku licence area (PEP 38560) on February 15. The intention is to drill a 250m deep stratigraphic exploration bore which will allow Widespread to confirm the shape of the Kotuku anticline, recover samples of the rock strata and the nature of any fluids contained within it. WEN last traded on December 4 at 12 cents.

Businesswire.co.nz

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