Stocks to watch: New Zealand equity preview

Friday 23rd 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 on Wall Street fell after Microsoft announced weaker-than-expected earnings, figures showed a surge in unemployment benefit claims and housing starts tumbled to a record low. The Dow Jones Industrial Average fell 2.3% to 8041.16.

Australian & New Zealand Banking Group (ANZ): US banks tumbled overnight on Wall Street, as economic figures stoked fears of a prolonged recession, erasing much of the gains from the previous session. Citigroup and Bank of America fell 14%. ANZ Bank fell 4 cents to $16.34 on the NZX yesterday and Westpac Banking Corp. rose 3.5% to $19.25.

Contact Energy (CEN): The biggest utility on the NZX 50 was cut to 'hold' from 'buy' at Goldman Sachs JBWere following the company's warning this week that underlying earnings would fall as much as 23% this year because of transmission constraints, higher gas costs and a drop in generation. The stock rose 2.4% to $6.76 yesterday.

Fletcher Building (FBU): Housing starts in the US, where Fletcher owns the Formica laminates business, tumbled 15.5%, seasonally adjusted, to an annual rate of 550,000 units in December, the lowest level since records began in 1959, according to the Commerce Department. A separate report showed house prices fell 8.7% in November from the same month of 2007. The shares rose 11 cents to $5.75 yesterday.

New Zealand Oil & Gas (NZO): Crude oil fell after US Energy Department figures showed inventories rose 6.1 million barrels to 332.7 million barrels as the economic slump curbed demand for fuel. Crude for March delivery fell 2.2% to US$41.74 a barrel on the New York Mercantile Exchange. The oil company's stock rose 2 cents to $1.26 yesterday and has gained 8% in the past three months.

Telecom Corp. (TEL): The nation's biggest phone company sank between $40 million and $70 million into its failed online shopping website Ferrit, the Independent reported, citing analysts including Lance Wiggs. Telecom shares climbed 4 cents to $2.51 yesterday. Investors who bought the shares five years ago have been handed a 55% loss.

Tourism Holdings (THL): Accommodation providers reported a 6.6% decline in sales in November, government figures on retail sales showed this week. That's the biggest decline in almost three years and adds to evidence that the global downturn is crimping demand for tourist services. The stock was unchanged yesterday at 70 cents and has dropped about 50% in the past six months.

By Jonathan Underhill

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