NZ stocks: Inflation data set the tone

By ELLEN READ

Life will slowly return to the markets this week, building up to Friday's release of last month's inflation figures.

Economists expect the CPI to have increased by 0.6 per cent in the last three months of last year, leaving the annual rate steady at 2.7 per cent.

Deutsche Bank senior economist Darren Gibbs sees just a few stand-out contributors to the result, including rises in rental rates and construction costs as a result of the buoyant housing market; a seasonal 5.5 per cent increase in international airfares; and a 10 per cent fall in domestic airfares as a result of the introduction of discounted airfares by Air New Zealand and Qantas.

Aside from these factors, most components are expected to inflate at around their recent trend rates, with the exception of some exchange rate-sensitive items such as household appliances and used cars, where price declines are expected, Gibbs said.

If the numbers are as expected, they will be in line with the Reserve Bank's November forecast and should have no implications for monetary policy settings.

Before that release, which also includes last month's food price data, Statistics New Zealand will unveil on Wednesday overseas merchandise trade (exports) for November.

In the equity arena, volumes will continue to pick up after the Christmas break. Goodman Fielder, the takeover target of Burns Philp, will release its target statement and directors' recommendation this week.

The e-learning company E-cademy Holdings holds a special general meeting at 23-29 Albert St tomorrow. It will be asked to approve the purchase of Champagne Consultants (CCL) by E-cademy subsidiary Interactive Learning Networks NZ, for between $750,000 and $1,250,000. Also on the agenda is a possible $1.1 million capital raising plan.

At the Stock Exchange, work continues on plans to revamp the NZSE-40 into an adjusted free-float NZSE-50 index.