Stocks to watch: CEN, FBU, MFT, NZX, OGC, TEL

Stocks to watch: CEN, FBU, MFT, NZX, OGC, TEL

March 7 (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: The market's focus is will remain fixed on the Reserve Bank this week, which is expected to cut the official cash rate by 50 basis points on Thursday in response to the 6.3 magnitude earthquake in Christchurch. The government is also set to release building consent numbers for January today, although the backward looking indicator is not expected to have much impact with the earthquake and OCR announcement overshadowing it.

Global equities retreated last week, as fighting between the Libyan army and rebels intensified. On Wall Street the Standard & Poor's 500 Index closed 0.7% lower at 1,321.15, while Europe's Stoxx 600 fell 0.6% to 281.9.

Contact Energy Ltd. (CEN): The energy utility's lack of flexibility in its gas supply and thermal generation fleet continue to weigh on earnings, according to Goldman Sachs & Partners analyst Matt Henry. The company was forced to sell unutilised energy stocks at distressed prices, costing it $23 million in the six months to Dec. 31. That compares to $19 million in the previous first-half. The shares rose 0.2% on Friday to $6.08.

Fletcher Building Ltd. (FBU): New Zealand's biggest construction company last week announced it will miss its guidance for full-year profit as a result of the Christchurch earthquake, which will disrupt existing repair work as the city assesses the damage. The quake will strip $14 million to $24 million off earnings in the year ending June 30, which Fletcher last month forecast at about $354 million. Its revised forecast means profit will be $330 million to $340 million, or as much as a 25% gain from a year earlier. The shares rose 1.2% on Friday to $8.81, the highest level since May 2008.

Mainfreight Ltd. (MFT): The trucking company is hitting up its bankers for as much as 120 million euros to buy Netherlands-based Wim Bosman Group. The New Zealand company will pay at least 110 million euros for the Dutch transport and logistics provider, with a further 10 million euro payment if the target achieving earnings before interest, tax, depreciation and amortisation of 20 million euros this year. The acquisition, which is scheduled to be completed by April 1, will give Mainfreight a foothold in Europe. Mainfreight’s shares rose 0.9% to $8.12 in trading on Friday, and have gained 4.1% this year.

NZX Ltd. (NZX): The securities market operator's chief financial officer Justin Bgoni announced he was stepping down after less than a year with the stock exchange operator. Bgoni’s role will be subsumed by the growing responsibility of Fiona Mackenzie, who was tapped last week to become NZX’s head of strategy, overseeing the bourse operator’s finances, new business opportunities and investor relations. The shares were unchanged on Friday at $1.85.

OceanaGold Corp. (OGC): Heightened tensions in the Middle East continued to drive demand for gold, with the hedge metal last trading at $1,478.29, near a historic high. Shares in OGC, the miner which operates the Macraes goldfield, fell 2.6% on Friday to $3.42.

Telecom Corp. (TEL): New Zealand's biggest phone company said the latest earthquake in Christchurch is expected to dent profits by several million dollars, according to a Fairfax Media report. The company said that while a portion of quake-related expenses will be covered by business insurance, much of the company's expenditure will not. The company booked a $4 million charge from the September earthquake, with market estimates putting the cost of the latest quake at three to four times higher. The shares rose 0.5% to $2.16.

(BusinessDesk)

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