Thursday 11th September 2008
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Themes of the day: Reserve Bank Governor Alan Bollard cut the official cash rate by a greater-than-expected 50 basis points to 7.5%, saying the economy is "experiencing a marked slowdown" while the global outlook has deteriorated. The kiwi dollar dropped after the statement amid expectations the nation's yield advantage will shrink.
Contact Energy (CEN): The biggest utility on the NZX 50 Index said its geothermal and gas-fired peaking projects are well placed the benefit from the government's drive to encourage renewable energy development. The comments were in a presentation to be given today to a Goldman Sachs JBWere Australasian Investment Forum 2008 in London. Contact stock fell 2% to NZ$8.82 yesterday and has gained 7% this year.
Fletcher Building (FBU): The nation's biggest construction company may benefit from a reduction in the central bank's benchmark rate, which may lead to lower mortgage borrowing rates. Real Estate Institute figures yesterday showed demand in the housing market has continued to dwindle and average prices have dropped. The stock fell 3.2% to NZ$7.50, extending its decline this year to 35%.
Renaissance Corp. (RNS): The distributor of consumer electronics and IT products will amend its dividend reinvestment plan to base the price on the ex-dividend share price. Until the change comes into effect, the company plans to make its next issue at a 5% discount to the price arrived at under the existing formula. The stock has fallen 26% this year to trade at 55 cents yesterday.
Telecom Corp. (TEL): The Institute of Directors said it was surprised that Telecom hasn't advised shareholders that new director Kevin Roberts is the brother of Telecom's head of human resources, Trish McEwan, the Dominion Post reported. Institute chief executive Nicki Crauford said the relationship would qualify as a conflict of interest, according to the report. The stock fell to a 15-year low NZ$3.03 yesterday.
Warehouse Group (WHS): The company is scheduled to report its full-year earnings tomorrow, with a 20% drop to about NZ$77 million expected amid weak consumer demand and high household costs. Today's cut in interest rates by the central bank may buoy prospects for Warehouse going forward. The shares traded at NZ$3.20 yesterday and have slid 45% this year.
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