Stocks to watch: New Zealand equity preview

Monday 28th July 2008

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

Themes of the day: Merchandise trade figures for July may show a deficit of NZ$300 million, widening from NZ$196 million in the previous month, according to UBS AG. Crude oil futures extended their slide on Friday in New York, settling at US$123.26. Losses and writedowns at the world's largest banks from the US housing recession may more than triple from the current US$450 billion, National Australia Bank chief executive John Stewart told the Australian Broadcasting Corp. yesterday.

Auckland International Airport (AIA): The nation's biggest gateway welcomed the announcement today of a new daily trans-Tasman service between Auckland and Melbourne by Pacific Blue. "This new international Pacific Blue service will stimulate greater demand for flying across the Tasman," chief executive Don Huse said. The shares were at NZ$1.92 on Friday. Air New Zealand (AIR) traded at NZ$1.24.

Fletcher Building (FBU): Shares of New Zealand's biggest construction company have gained 5% the past month, outpacing a 1% gain in the NZX 50 Index. Banks began cutting home loan rates last week after the central bank lowered the official cash rate to 8% from 8.25%. ASB Bank lowered its two-year rate to 8.95%. Westpac has said it will follow suit on Monday and will take its two-year rate to 8.95%. Lower borrowing costs may help revive demand for housing.

Kiwi Income Property Trust (KIP): New Zealand's listed property sector in New Zealand is "by and large in very good shape," helped by low gearing and demand in main centres, particularly Auckland, according to the manager of Kiwi Income. KIP's debt to total assets ratio was 27% in the year ended March 31. KIP's units last traded at NZ$1.16 and have dropped 13% this year.

Widespread Portfolios (WID): The investor in mineral exploration projects said New Zealand's largest fertilizer companies may invest in, or buy the output from a proposed project to extract rock phosphate from the seabed at its Chatham Rise prospect. Widespread last traded at 46 cents.

By Jonathan Underhill

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