Stocks to watch: AIR, FBU, KMD, VCT, WHS, WBC

Stocks to watch: AIR, FBU, KMD, VCT, WHS, WBC

Jan. 24 (BusinessDesk) – The following stocks may be active on the New Zealand exchange after developments since the close of trading. All prices are in New Zealand dollars unless specified.

Themes of the day: Reserve Bank Governor Alan Bollard will likely keep the Official Cash Rate unchanged at 3% this week, according to a Reuters survey of 20 economists. The market is betting interest rates will remain on hold until the third quarter to allow New Zealand's economy to recover after narrowly avoiding a double-dip recession last year. Global equities rose last week as record German business confidence numbers helped boost investors' appetite for higher yielding, or riskier, assets. The Standard & Poor's 500 Index closed 0.2% up at 1283.35, while in Europe the Stoxx 600 rose 0.7% to 281.26.

Air New Zealand Ltd. (AIR): The national airline carried 1,322,000 passengers in December 2010, almost 10% more than the same month a year before, while load factor rose by 1.3% to 86.3%, with revenue passenger kilometers up 7.7% to 2,861 million. Much of the increase was built on the back of a 10.9% increase in short haul passenger numbers to 1,140,000, broken down to a 10.7% lift in the domestic market and a 13.9% increase in Tasman/Pacific. Shares fell 1.4% on Friday to $1.42.

Fletcher Building Ltd. (FBU): New Zealand's biggest construction company, fell 03% on Friday to $7.77 after takeover target Crane Group Ltd. posted a 15% gain in first-half profit and forecast a “strong” second half on demand for pipes and building materials. Net profit rose to A$18.2 million in the six months ended Dec. 31, from $15.9 million a year earlier, the Sydney-based company said in a statement. Sales rose 5.7% on Friday to A$986.7 million.

Kathmandu Holdings (KMD): The outdoor clothing retailer may close its operations in the U.K., according to reports on the Stuff website. The company has six stores in country and a small foothold in Europe, which ran up pre-tax losses of £500,000 ($1.05 million) last financial year. Shares rose 1% on Friday to $2.10.

Vector Ltd. (VCT): The government's announcement that Telecom had preferred bidder status to roll out fibre in the Auckland region was a significant blow for the company's fibre aspirations, according to Forsyth Barr analyst Andrew Harvey-Green, quoted on the ShareChat website. He said that while Vector is still on the short list, the chances of it winning are slim. Shares fell 0.4% on Friday to $2.46.

Warehouse Group (WHS): The pending retirement of chief executive Ian Morrice has fuelled speculation that New Zealand's biggest listed retail could be on the selling block, according to a report in the New Zealand Herald newspaper. A previous bid for the company by Foodstuffs and Woolworths Australia in 2006 was blocked by antitrust authorities due to concerns over competition in the supermarket sector, a market Warehouse has subsequently withdrawn from. Share rose 0.3% on Friday to $3.63.

Westpac Banking Corp. (WBC): New Zealand’s second-biggest lender by total assets said it was looking to raise up to 1 billion euros through a covered bond issue. The deal follows a similar raising by Bank of New Zealand, with four investment banks given the mandate to manage the sale. The bank will test investor appetite for the sale when they go on a roadshow to meet European investors. Share rose 1.4% on Friday to $29.40.

(BusinessDesk)

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