Stocks to Watch: New Zealand Equity Preview

Monday 5th January 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 rose in the U.S., Europe and Asia on Friday, while New Zealand's equity market was closed for the New Year's holiday, with the Standard & Poor's 500 Index gaining 3.2%. Crude oil rose US$1.41 to US$46.04 in New York amid increasing tensions between Israel and Palestine.

Fletcher Building (FBU): New Zealand's largest construction company fell 48% in the past 12 months on a weaker-than-expected performance from its Formica unit and a downturn in residential building demand in Australia and New Zealand. A slump in housing consents in New Zealand, which hit a record low in November, suggests 2009 "is going to be a very tough year," chief executive Jonathan Ling told the NZ Herald.

Metlifecare Ltd. (MET): The operator of rest homes tumbled 50 cents to NZ$2.50 in the final two weeks of 2008, extending its decline after suspending its dividends on Dec. 23 and announcing plans to raise as much as NZ$40 million selling shares, as the weakening economy weighs on the property market. The stock fell about 60% last year.

New Zealand Oil & Gas (NZO) The oil company's stock gained 2.4% to NZ$1.27 on Dec. 31. Since then the price of crude oil has extended its gains amid mid-east tensions and Russia's decision to halt gas supplies to Europe via Ukraine over a price dispute with its neighbour.

Nuplex Industries (NPX): The maker of resins and chemicals used in adhesives, paint and printing inks has sunk 55% in the past 12 months. A report on Friday showed Australian manufacturing contracted in December with a reading of 33.7, where anything below 50 indicates a contraction, according to a report by the Australian Industry Group and PricewaterhouseCoopers.

Telecom Corp. (TEL): Chief executive Paul Reynolds said the company's AAPT unit will be "generating cash" this year and will re-enter the market with advertising and promotions, according to a Q&A with the NZ Herald. AAPT "has become an attractive asset" and is generating interest from potential buyers, he said. The shares rose 1.8% to NZ$2.29 on Dec. 31 and have dropped 46% in the past 12 months.

By Jonathan Underhill

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