Archive | Archive – local business

Snapshot on local business, week to 16 June 2002

15 June 2002

New Zealand was 1 of 9 countries elected to the governing body of the 170-member/affiliate member International Organisation of Securities Commissions, which NZ commission chairman Jane Diplock said was “important international recognition of New Zealand as an increasingly well regulated market and one suitable for international investment.” I’m sceptical about the recognition — more often, as with Mike Moore’s appointment to the World Trade Organisation, it’s a case of momentary enthusiasm — and sceptical about the value of worldwide input to issues derived from US activity which has been dealt with speedily there. Nevertheless, the role has potential for strong New Zealand input & gains, because the executive committee is dealing with implications of the Enron collapse, issues relating to the independence of analysts’ reports, accounting & auditing standards and demutualisation of stock exchanges.

14 June 2002

Sky City Entertainment Group Ltd applied to the Australian Stock Exchange today for a full Australian listing from 1 July, to maintain a dual listing. Managing director Evan Davies said about 65% of the casino company’s shareholders — 18,000 — were New Zealand residents. Many of its Australian institutional investors joined the register when Brierley Investments Ltd sold down its holding.

11 June 2002

ASB Bank said its lending to rural customers had topped $2 billion 5 years earlier than budgeted, 9 years after the rural division was opened. Its 30% growth over the past 12 months was at twice the market rate, ASB Bank Rural general manager Derek Farrelly said. The first $1 billion took 6 years to lend.

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Snapshot on local business, week to 30 September 2001

26 September 2001

Something to take the Securities Commission a year getting nowhere useful: It announced an inquiry into “the circumstances” surround the trading/suspension thereof/reinstatement of trading in Air NZ shares. It would cover “the effects on the market of various announcements & disclosures” and “the role of market participants & others”.

25 September 2001

Logan Corp Ltd (Eric Watson) has offered $1.76/share ($33 million), 31c above Friday’s close, to take out the 37% it doesn’t own in listed Pacific Retail Group Ltd. The shares traded at $1.76-1.78 today.

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Snapshot on local business, week to 8 December 2002

3 December 2002

The Auckland Regional Council intends to adopt capital value as the basis for general rates, will have no uniform annual general charge and will have no business or rural differentials. Ratepayers living in areas with public transport will pay more for that part of the regional rates bill than those without. The biosecurity component of rates will be levied on land value because the service is closely related to land activities. The regional council’s bill was tacked on to the rates levied by territorial councils until this year, but from next year will be charged separately.

Auckland Regional Council hydrogeologists have recommended doubling the volume of water to be allocated from the Pukekohe volcanic aquifer. Water from this natural underground reservoir was fully allocated under the previous guidelines, but regional council hydrogeologist Zeljko Viljevac has found more than double the previously allocated volume could be sustainably allocated. The area produces a quarter of the nation’s vegetables.

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Snapshot on local business, week to 17 February 2002

12 February 2002

Retail sales rose 0.8% from November to December, seasonally adjusted, Statistics NZ said. October was flat, November was also up, and the result was a 2% increase for the December quarter over the September quarter. Statistics NZ said the December quarter result was boosted by a 7.9% rise (seasonally adjusted) in vehicle sales. Core retailing, excluding vehicle services & sales, rose 1.8% in the December quarter. Average retail growth since June 1998 has been about 1.4%/quarter.

11 February 2002

Dave Rickards, a co-founder of Clints Crazy Bargain Stores Pty Ltd, one of the 2 Australian chains taken over by The Warehouse, has resigned from the Warehouse board but will continue to supply it with Asian product. Mr Rickards was a Warehouse executive from August 2000, joined the board in November 2000, and still has a significant shareholding.

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Snapshot on local business, week to 20 October 2002

19 October 2002

Australia Insurance Group (IAG)’s $A1.855 billion purchase of CGU in Australia and NZI in New Zealand from Aviva plc (just after Aviva had finished changing all the NZI branding) is now down to the financing arrangements: $A500 million of institutional placement at $A2.55/share, a share purchase plan this year for $A380 million for all IAG’s eligible shareholders in Australia & New Zealand, and possibly a dividend reinvestment plan early in 2003 for $A160 million, $A250 million of hybrid equity to replace senior debt in New Zealand (Deutsche Bank and UBS Warburg to run the book as joint lead managers, in the first quarter of 2003), $A735 million of debt, $A124 million of internal funds. All those arrangements will replace bridging finance from Deutsche and UBS Warburg. IAG bought State Insurance from Aviva in February 2001.

Auckland City Council’s transport committee will decide on Wednesday 23 October if it supports a detailed phase 2 study of options to develop the eastern corridor, and Manukau City Council’s transport committee will meet the next day to consider the issue.

18 October 2002

Australia’s newspapers have Australia Insurance Group (AIG) way past due diligence on buying NZI, into the details of an Australian placement and issue of $250 million in hybrid equity in New Zealand. Back at head office, all IAG would crustily come out with yesterday was that it was “in discussions with Aviva plc regarding a proposed acquisition of the Australian and New Zealand general insurance businesses of CGU and NZI… These discussions are not complete and no transaction has been concluded… On the basis that an acquisition may proceed, IAG is also reviewing appropriate funding arrangements.” The question, according to the Sydney Morning Herald today, was the price of the $A500 million institutional placement for the $A1.855 billion deal, in a range from $A2.55 to $A2.80. Even at the highest price in that range, it’s a discount to IAG’s Tuesday share price of $A2.95.

15 October 2002

Inflation rose 0.5% in the September quarter over the previous quarter & 2.6% on a year ago. Food inflation rose 0.1% for the quarter & 2.3% for the year. Statistics NZ said the June-to-September increase reflected higher prices for housing, household operation, alcoholic drinks & healthcare. Housing prices rose 0.9%, driven by increases in the purchase & construction of new homes (0.6%), local body rates (2.5%) & rent (0.8%). Used cars fells 2.7%, petrol 2.4%, international air travel 1.9%. The diary I bought today was 20% more expensive than the same model last year, no more pages.

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Snapshot on local business, week to 22 July 2001

Latest: Westfield Trust NZ issues $A220 million of notes, Carter Holt Harvey loses $34 million in June quarter, regional transport Late in motion, Regional development conference planned for November, CPI on 3.2%.

17 July 2001

Westfield Trust NZ Ltd, a subsidiary of the Sydney-listed shopping centre investor Westfield Trust, issued $A220 million of four-year notes in Australia on Tuesday, $A170 million of it at a fixed rate and priced at a margin of 53 basis points above the equivalent semi-annual swap rate, the remaining $A50 million at a floating rate 53 basis points above the 90-day bank bill swap rate. Westfield now has $A1.04 billion issued under its medium term note programme, carrying an A (stable) S&P rating. Proceeds will be used to repay existing debt. Westfield Trust owns the former St Lukes shopping centre chain in New Zealand.

Carter Holt Harvey Ltd made a $34 million net loss for the June quarter on net sales up 2% to $972 million, compared to a $90 million profit a year earlier. Operating earnings before interest and tax were $31 million ($51 million March 2001 quarter, $120 million June 2000 quarter), ebit after restructuring and one-off items was down 96% to $4 million ($113 million). In the latest result, a $29 million restructuring charge was made, of which $25 million was to write off the mothballed assets of the Mataura paper mill and Mt Burr sawmill.

The project to establish a rapid transit network around the Auckland region keeps moving forward. The latest step was for the local authority trading enterprise charged with holding the rail assets and improving public passenger transport, Auckland Regional Transport Network Ltd, was incorporated on 2 July with Ross Keenan as chairman and has appointed Graeme Campbell as corporate development manager to co-ordinate the establishment process. Mr Keenan and Mr Campbell worked together on establishment of the Ansett NZ airline.

Regional development minister Jim Anderton told the Mayors’ Taskforce for Jobs today he expected about 500 people would attend a regional development conference in Rotorua on 28-29 November. He said the conference would help develop a national vision and improved communication between regions. In four rounds of grants, the regional partnerships programme has committed $2.22 million to 19 regional partnerships, out of $33.7 million to be provided over three years.

The consumer price index rose 0.9% in the June quarter after falling 0.2% in the March quarter. On an annual basis the inflation rate hit 3.2%, the seventh consecutive annual rise. Primary causes for the rise were higher petrol prices (up 37% in two years) and higher international airfares (up 7.9% in the June quarter). Food prices rose 0.8%. Increased home insurance pushed house prices up 0.2%.

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Snapshot on local business, week to 2 March 2003

27 February 2003

Intriguing economic theory: This 1 reached me tonight as a pass-on-to-10-people message and we’ll cover the country in minutes. Petrol prices could hit $1.35 by winter but campaigns that hurt the consumer and not the oil company don’t get prices back down. The idea in the email: Don’t buy petrol from the biggest oil company (that’s BP) for the rest of the year. A widespread resolve should cut its turnover, which should bring a price cut. When the biggest company cuts its prices, the others should follow suit. Will it work? I don’t believe so without a strident campaign led by a respected person. Quiet determination versus the easy option, in this country the easy option wins every time.

Richina Pacific Ltd’s $US10.4 million rights issue is in jeopardy after Ming Lu, board representative of 9.6% shareholder JP Morgan Partners (BHCA) LP, declined to sign the prospectus & wouldn’t resign. All directors must sign a prospectus before it’s issued. The issue has received all regulatory consents & was approved by shareholders in December, though JP Morgan Partners opposed it. Richina Pacific now wants a special meeting to oust Mr Lu from the board.

Savoy Equities Ltd stayed alive in 2002 with a $60,000 surplus on revenue up 14% to $349,000, compared to a $615,000 loss in 2001. No word of the High Court action against the Auckland City Council for the loss of its Britomart project, a diminishing earnings prospect the further back in memory that council decision gets.

24 February 2003
Downer EDI Ltd increased after-tax profit for the December half by 7.1% to $A21.8 million on revenue down 2.4% to $A1.22 billion. The strong 1st-half cashflow, up from $A28.8 million to $A143.9 million, was used to cut debt from $A447 million to $A340 million, cutting Downer’s gearing from 38.6% in June to 31.4%. The order book hit a record high $A5 billion, up 11%. Managing director Stephen Gillies said directors expected a strong 2nd half and total after-tax profit of at least $A63 million, up 11.7%, equating to at least A6c/share, up from A5.8c/share. Works Infrastructure performed above budget in both Australia & New Zealand and Downer Engineering raised turnover slightly. An unchanged A0.5c/share dividend (unfranked) will be paid. The board is considering a share buyback programme.

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Snapshot on local business, week to 21 December 2003

19 December 2003

New Zealand had a $6 billion current account deficit for the September 2003 year was a deficit of $6,004 million, up 36.5% on the $4.4 billion deficit the previous year. The country’s net debtor position increased by $4 billion (4%) to $102.1 billion (the gap between New Zealand’s international investment liabilities and its international investment assets) in the September quarter. Government Statistician Brian Pink said the key features were a $6.5 billion net inflow of capital, partly offset by a $1.7 billion fall in financial derivative net liability positions, and an $800 million fall in net liabilities arising from changes in the value of assets and liabilities.

15 December 2003

Merchandise export prices fell 1.8% in the September quarter, imports 1.5%, taking the terms of trade down 0.3% or the quarter. The $NZ rose 2.2% as measured by the trade-weighted index. Pastoral & dairy export prices fell 2.8%. Among imports, mechanical machinery fell 3.2%, electrical machinery 4%, petroleum & petroleum products 3.5%. Seasonally adjusted imports have risen for 8 quarters, this time by 1.2%, increasing import volumes by 10% in a year.

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Snapshot on local business, week to 17 March 2002

13 March 2002

The food price index fell 0.5% from January to February — fresh vegetables were up 15% in January and specials on Valentine’s Day chocolates helped cut February grocery prices 10%. But over the year from February 2001, the food price index rose 4.5%. Meat, fish & poultry were up 11.2%, Statistics NZ said.

12 March 2002

Latest overseas trade indexes shown New Zealand’s merchandise terms of trade fell 2.2% in the December quarter after rising 1.1% in the previous quarter. Statistics NZ said export prices fell & import prices rose. The terms of trade for services rose 0.5% on a higher rise in export than import prices. Price falls were recorded for exports of non-food manufactures, dairy products & non-fuel crude materials. Price increases were recorded in several of the main import commodities. Excluding mineral fuels (mainly petroleum & petroleum products), import prices would have risen 1.1%.

January retail sales rose 9.1% over January 2001 figures to $3.95 billion. Excluding the 13.6% rise in vehicle retailing, the rise was 9.9%. Biggest category rises were by furniture/floor coverings 16.5%, clothing/softgoods 16.3%, footwear 14.9% & food retailing 10.5%. Accommodation/hotels/liquor rose 7.8%. Sales in the Auckland region rose 10.8% to $1.26 billion & Waikato region sales rose 11.6%.

Insurance company American International Group (AIG) is offering a stand-alone terrorism policy in response to widespread demand following the 11 September terrorist attacks in the US. “Despite the recent US tragedies we still consider terrorism as an insurable event,” AIG’s New Zealand general manager, Anton du Plessis, said. “Banks & large institutions with property interests are being advised that the exclusion of terrorism cover in property mortgages & other loan programmes will reduce their security against those loans.”

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