Showing posts with label allan bollard. Show all posts
Showing posts with label allan bollard. Show all posts

Thursday, March 10, 2011

AUDIO: Two Essential Investor Interviews

I have included two crucial interviews carried out by Kathryn Ryan from Radio New Zealand made over the last two days.

The first is an interview with Mark Binns, infrastructure CEO of Fletcher Building Ltd [FBU.NZX] where he talks about his company's role in rebuilding Christchurch and the obvious benefits that will bring to the company over the next 3-5 years.

The second interview is with Allan Bollard, Reserve Bank Governor, and his rationale for increasing the OCR today by 50 basis points to 2.5%.

The last interview is especially interesting given that Bollard made a preemptive rate cut today rather than the typical reactive moves that he usually makes, so it is clear that he sees the economy getting worse over 2011, partly due to the Christchurch Earthquake and that things will not pick up until 2012 when we will see increasing economic activity surrounding , ironically, around the rebuilding of Christchurch.

Fletcher Building will be one of the largest benefactors of this rebuilding so it makes the interview compelling listening to those investors thinking of buying FBU shares.

Download Interviews


Mark Binns
Allan Bollard


Recent Share Investor Reading


Discuss this topic @ Share Investor Forum

Recommended Fishpond Reading

Crisis: One Central Bank Governor and the Global Financial Collapse

Buy The Intelligent Investor & more @ Fishpond.co.nz

Fishpond

Fishpond


c Share Investor 2011

Thursday, July 29, 2010

Official Cash Rate: Bollard Gets it Wrong, Again

Allan Bollard's decision today to raise the official cash rate by .25% to 3.00% is further evidence that Mr Bollard is out of his depth.

His raising of rates to record levels a few years back did nothing to damage the housing boom - the 2008 financial crisis took care of that.

Most of Mr Bollard's movements have been based by looking in a fogged up rear view economic mirror with little understanding of the current and future outcomes. His movements lack foresight, basic economic understanding and the ability to see the bigger picture.

What is clear is that the world is having economic problems, especially struggling with debt, and what New Zealand relies on to keep afloat, exporting, is going to be hurt again by this latest rise.

Likewise the mortgage holder is going to have problems, at a time when there is no spare cash to spend in a faltering economy.

One only has to look towards the United States near zero cash rate to see what problems this latest rise will cause - our OCR is too high.

The wise thing to do today would have been for Mr B to lower the cash rate to 2.5% and keep doing it to stimulate business lending and therefore the economy.

Any 3rd form economics student would have done the same.


Related Share Investor Reading

Alan Bollard Speaks, but who is listening?
Alan Bollard's indecision over OCR a worry to NZ INC
Bollard sits on his hands
Mr Conservative

Discuss this topic @ Share Investor Forum


From Fishpond.co.nz

After The Panic



c Share Investor 2010

Wednesday, March 19, 2008

Dr Cullen needs to intervene in OCR

http://www.rightblueeye.com/blog/wp-content/uploads/2007/08/a450ee0e-34cc-4191-bd03-9131f7b31fa0.jpg
The New Zealand Government is happy to intervene where its citizens don't want them
but when it comes to the precipitous economy in relation to lowering interest rates,
Michael Cullen gets blisters on his hands from sitting on them.


Original story from Share Investor Blog

I'm not an interventionist by any stretch of the imagination but our monetary system, for better or worse, is, and so is the present regime that presides over the country's books, the New Zealand Labour party.

The interventionist approach in regard to the Reserve Bank and through the official cash rate(OCR) has led NZ INC, courtesy of drunken overspending and overtaxing by the aforementioned regime, to the highest interest rates in the "developed" world.

The Mike and Helen show has put the country in a very precarious position, given the uncertainty over the global economy and the "credit crunch"(2 days in a row, sorry) has slowed the wheels of commerce globally.

This dastardly duo seem quite pleased that an excuse like the global credit crunch has come around because they are now on a PR offensive to blame any current or future New Zealand downturn on it and not themselves, where the bony finger should be pointing.

The sensible among us know that high interest rate were here 3-4 years ago and then we though a credit crunch was a new chocolate bar bought on time payment.

Like Al Gore's science fiction movie "The Inconvenient Truth", we also know, like that movie, the M and K show lacks consistency and truth. When it comes to the economy we can all remember the Labour Party taking the accolades for the nearly 4% growth we had for a nano second, but they now blame the downturn and any possible downturns on other circumstances.

You cant have it both ways.

Now this government's profligate taxes and spending(they go hand in hand) has put its citizens in such debt that we even outrank those nasty Americans for our debt levels. This debt is primarily in real estate and servicing the high interest debt that bought it.

Higher house prices meant more borrowing on the increased equity, because taxes are so high we had to borrow to survive.

So guess what, now things are in reverse, because of that debt we are in potentially a worse condition than America.

They at least borrowed to buy other sorts of assets beside houses, while we sunk most of ours into houses and plasma TVs.

While we haven't had the extreme reckless lending like America's Sub Prime loans, we have got many thousands of kiwis who have borrowed more than they will be able to service when the shit hitith the fan.

Its hitting now.

NZ$40 billion of mortgages will be refinanced this year alone at close to 10% and others will be higher, the time for intervention is now.

The OCR should have been cut at least a year ago but now there is urgent need for it. An emergency cut to bring it into line with other nations suffering from the sub prime fallout would be a key move in the right direction.

There is no use sitting on your hands waiting "to see what happens" according to Alan Bollard, the Reserve Bank Governor. Decisive action needs to be taken because inflation is the least of his/our worries now.

Like I have said before the OCR is a poor way to maintain an economic system, it doesn't serve its purpose well, but it is all we have at present.

A progressive cut over this year, down to below 6%, starting with a .75 point basis cut will send a good message to the market and business, that lending rates will be somewhat dampened and business will be stimulated when it needs it.

Our socialist government are intervening in every other part of our lives, including the private business world but for the life of me , when we really do need intervention, Micheal Cullen just sits on his calloused hands and blames others for our countries current mis- fortunes.

Get off your arse and do something history boy.


Essential related reading from Share Investor

Global credit squeeze: There is no free lunch
Current Credit crunch a blessing in disguise
Lenders must come clean over losses to restore faith in credit markets


c Share Investor & Political Animal 2008

Time for OCR intervention by Dr Cullen

http://www.rightblueeye.com/blog/wp-content/uploads/2007/08/a450ee0e-34cc-4191-bd03-9131f7b31fa0.jpg
The New Zealand Government is happy to intervene where its citizens don't want them
but when it comes to the precipitous economy in relation to lowering interest rates,
Michael Cullen gets blisters on his hands from sitting on them.



I'm not an interventionist by any stretch of the imagination but our monetary system, for better or worse, is, and so is the present regime that presides over the country's books, the New Zealand Labour party.

The interventionist approach in regard to the Reserve Bank and through the official cash rate(OCR) has led NZ INC, courtesy of drunken overspending and overtaxing by the aforementioned regime, to the highest interest rates in the "developed" world.

The Mike and Helen show has put the country in a very precarious position, given the uncertainty over the global economy and the "credit crunch"(2 days in a row, sorry) has slowed the wheels of commerce globally.

This dastardly duo seem quite pleased that an excuse like the global credit crunch has come around because they are now on a PR offensive to blame any current or future New Zealand downturn on it and not themselves, where the bony finger should be pointing.

The sensible among us know that high interest rate were here 3-4 years ago and then we though a credit crunch was a new chocolate bar bought on time payment.

Like Al Gore's science fiction movie "The Inconvenient Truth", we also know, like that movie, the M and K show lacks consistency and truth. When it comes to the economy we can all remember the Labour Party taking the accolades for the nearly 4% growth we had for a nano second, but they now blame the downturn and any possible downturns on other circumstances.

You cant have it both ways.

Now this government's profligate taxes and spending(they go hand in hand) has put its citizens in such debt that we even outrank those nasty Americans for our debt levels. This debt is primarily in real estate and servicing the high interest debt that bought it.

Higher house prices meant more borrowing on the increased equity, because taxes are so high we had to borrow to survive.

So guess what, now things are in reverse, because of that debt we are in potentially a worse condition than America.

They at least borrowed to buy other sorts of assets beside houses, while we sunk most of ours into houses and plasma TVs.

While we haven't had the extreme reckless lending like America's Sub Prime loans, we have got many thousands of kiwis who have borrowed more than they will be able to service when the shit hitith the fan.

Its hitting now.

NZ$40 billion of mortgages will be refinanced this year alone at close to 10% and others will be higher, the time for intervention is now.

The OCR should have been cut at least a year ago but now there is urgent need for it. An emergency cut to bring it into line with other nations suffering from the sub prime fallout would be a key move in the right direction.

There is no use sitting on your hands waiting "to see what happens" according to Alan Bollard, the Reserve Bank Governor. Decisive action needs to be taken because inflation is the least of his/our worries now.

Like I have said before the OCR is a poor way to maintain an economic system, it doesn't serve its purpose well, but it is all we have at present.

A progressive cut over this year, down to below 6%, starting with a .75 point basis cut will send a good message to the market and business, that lending rates will be somewhat dampened and business will be stimulated when it needs it.

Our socialist government are intervening in every other part of our lives, including the private business world but for the life of me , when we really do need intervention, Micheal Cullen just sits on his calloused hands and blames others for our countries current mis- fortunes.

Get off your arse and do something history boy.


Related Share Investor reading

Global credit squeeze: There is no free lunch
Current Credit crunch a blessing in disguise
Lenders must come clean over losses to restore faith in credit markets


Related Amazon reading

Interest Rate, Term Structure, and Valuation Modeling

Interest Rate, Term Structure, and Valuation Modeling
Buy new: $56.67 / Used from: $39.00
Usually ships in 24 hours


c Share Investor 2008

Friday, December 7, 2007

Share Investor Friday Free for all: Edition 13

Bollard sits on his hands

http://www.illustr8.co.nz/images/Editorial%5Calan-bollard.jpg

Allan Bollard in a more animated frame of mind.


Allan Bollard rattled his sabre again this week.

Keeping the cash rate at 8.25% while telling us inflation was a risk down the road.

Well helloooo! could one of the reasons to the risk of inflation be your 4 rate hikes this year and multiple ones over the last few years?

The short answer is yes but the less interesting answer is that Bollard is clearly out of his depth.

Barely able to see over the rims of his accountant style glasses, he rarely has the vision to see further than what happens from day to day..

Instead of dropping the cash rate, as he should have, he risks putting the New Zealand economy at the sort of risk the Labour Government has put it under for the last 8 stifling years.

Labour did it with world record breaking high taxes, removing cash and investment from the economy and Bollard did it with the worlds highest interest rates outside the worlds other banana republics, ditto removing cash from street level and strangling productive investment, savings and business.

World economies are cutting rates to stimulate economies and Bollard sits on his hands. It looks like he will only move once the economic cycle we are in is in the middle of a meltdown.


The Warehouse wont be sold for a bargain


http://www.ezgo.co.nz/images/default/galleryimages/silvia%20park%20warehouse.jpg

Warehouse extra store, one of only three


It looks like it is all on for young and old in the fight for The Warehouse.

After the recent High Court decision granted New Zealand's Foodstuffs and Australia's Woolworths the right to bid for the general merchandise retailer the two prospective buyers have wasted no time in talking to Warehouse management.

Competition between the two to bid for the company is going to be intense and this writer has a $NZ 50000.00 bet that the bidding is going to be explosive.

There is talk of Foodstuffs teaming up with a private equity player to make a bid but the star likely to shine through is Woolworths. It has a very strong balance sheet, excellent cash flows and a history of paying good money for assets it really wants.

The share price has already done the impression of a Nasa rocket by taking off from below 5 bucks last week to close at NZ$6.65 today.


The Canadians Fly in, again.

In the long running saga that is the Auckland International Airport merger/takeover, yesterday news that the Canada Pension Plan Investment Board has changed the terms of its proposed amalgamation with the airport, stimulating more interest in the company's shares. CPPIB would reduce the convertible note component and increase the value of the ordinary share.

http://upload.wikimedia.org/wikipedia/commons/thumb/f/f8/Auckland_airport_international_terminal.jpg/800px-Auckland_airport_international_terminal.jpg

Part of the main Auckland international airport at Mangere

It is offering a convertible note, valued at $2.75, an ordinary share valued at 70.5c and 20c cash.

The proposal will be put to airport shareholders only if CPPIB's $3.66 a share all-cash partial takeover bid for 40 per cent of the airport is successful.

The proposed amalgamation, which requires the support of 75 per cent of airport shareholders, is the second part of the CPPIB's two-pronged scenario to negotiate a restructure of the airport's balance sheet to realize tax benefits.

That offer opens on December 14 and closes mid-March.

The possibility that the board will recommend the bid to shareholders could be a little dodgy considering the pedigree of some of its board members.

Lloyd Morrison or John Brabazon have voiced their opposition to such deals over the last 6 months or more of this long opus and the two council shareholders look reluctant to sell.

Who the hell knows really. The sale process of the airport has only been trumped in its complexity and opaqueness by the sorry tale of Sky City Entertainment and its managements' dilly dallying over bids for the casino company.


Hobson's choice


http://www.kiwisaver.org/assets/2007/5/9/GirlwithKiwifruit.JPG

According to NZ Government stats the Kiwisaver super scheme has 300,000 participants that have "chosen" to "enroll" in it.

What is left out of any analysis is that the scheme is an opt out one rather than opt in so the bulk of those 300,000 haven't done anything. They are merely too lazy to opt out.

Micheal Cullen, our out of his depth Minister of Finance, of course trumpets this as a great success but as usual leaves out the details when they don't stand the scrutiny of logical argument and clear thought processes.

Of course this is the chap who has spent the last 8 years telling New Zealanders that tax cuts don't stimulate economies but is going to hand our money back to us in election year 2008.

Good luck balancing your check book Mr Cullen.

I'm no big fan of this harebrained state controlled and controlling scheme because it is expensive and tax inefficient but it will benefit shareholders in New Zealand listed companies.


Burgers going for half price


http://nzdaisuki.com/yellowpage/upload_img/Burgerfuel.jpg

In Burger Fuel news, you guys out there love Burger Fuel:

According to Google information released this week, Burger Fuel was the subject of the most internet searches of any New Zealand listed company.

This is no surprise to me because I have known this little tidbit since the company listed back in July. Its the biggest search term on my blog as well, followed by the worlds credit problems and Pumpkin Patch Ltd.

Incidentally the share price still languishes at 60c and is thinly traded, with a massive $150 going through today.

Its still on my watchlist though.


NZX Market Wrap & commentary

6:27PM Friday December 07, 2007
By Melanie Carroll, NZ Herald


New Zealand shares made a late rebound today to recover the ground lost after last week's downgrade by international share index compilers MSCI.

The benchmark NZSX-50 index closed up 49.4 points, or 1.2 per cent, at 4092.9, its highest in over a week. Turnover totalled $109 million, and rises outnumbered falls by 58 to 38.

Lines company Vector was the standout stock, recovering to a two-month high of 251, up 6c or 2.5 per cent, from 218 last week.

"The stock always looked cheap anyway but particularly post-the MSCI selldown the market is starting to focus on fundamentals behind the stock, and the fact that there was effectively a profit upgrade in recent times," Macquarie Equities NZ investment director Arthur Lim said.

Other blue chips to rebound were Telecom, up 13c to 444, Auckland Airport, up 7c to 289, Fletcher Building, up 29c to 1169, Fisher & Paykel Healthcare, up 11c at 329, and F&P Appliances, rising 6c to 340.

Sky City was up 6c at 491, Sky TV rose 3c to 566, and Contact Energy slid 17c to 847.
The compilers of the MSCI indexes, which guide international trading and portfolio composition, downgraded New Zealand and are removing five of the top-10 stocks due to lack of liquidity and market capitalisation.

Remaining in the index are Telecom, Fletcher Building, Contact Energy, Auckland Airport and Sky City.

The Warehouse
was up 10c at 664, having jumped over 12 per cent since the High Court overturned a Commerce Commission ruling blocking supermarket chains Foodstuffs and Woolworths from bidding for the retailer.

"If you add back the special dividend of 35c, it means that the price is now the equivalent of $7. Clearly the market is saying it is unlikely that the Commerce Commission is going to appeal, and it follows news in Australia that discussions have started taking place between the different parties," Mr Lim said.

Air New Zealand was up 3c at 182, Nuplex gained 10c to 700, Infratil was up 7c at 297, Mainfreight rose 11c to 721, and Ryman Healthcare was up 2c at 212.

Freightways fell 6c to 374, Pumpkin Patch was down 5c at 265, NZX fell 5c to 925, and ING Medical Properties was down 2c at 122.

Among dual-listed stocks, ANZ jumped 50c to 3225, Westpac was up 35c to 3265, AMP rose 16c to 1192, and Lion Nathan rose 17c to 1090.

NZPA


Disclosure: I own Auckland Airport, The Warehouse shares

C Share Investor 2007

Friday, September 14, 2007

Share Investor's Friday Free for all: Edition 3

Fast Food Company keeps its Head

Restaurant Brands (RBD) the operator of KFC, Pizza Hut and Starbucks in New Zealand has appointed, Russel Creedy, the man who has been acting chief executive since Vicki Salmon's departure to the permanent position as head.

Creedy has been with the company since 2001 and has run company supply chains and Pizza Hut in that time.

Unfortunately Creedy is part of the lack of service culture that pervades RBD's operations and his appointment comes in the wake of his failure at the Pizza Hut division to stem sales drops in the face of competition and the continuation of that as acting head.

His placement as the top Colonel seems to me to be a default kind of appointment and smacks of nobody else outside the company with enthusiasm and fresh ideas being attracted to the sinking ship that is Restaurant Brands.

As an aside but related story Mac Donald's in the US is making inroads into Starbuck's territory with better product and cheaper prices. This author wonders how the local bean crusher is faring against the big Mac.

Retail Therapy

Two of the countries larger retailers reported profits today, with similar results.

Clothing retailer Hallenstein Glasson (HLG) reported a 1.3% fall in net profit to NZ$21.4 million.

Sales were marginally up to just over $200 million with New Zealand operations struggling and Australian sales up a solid 8.1 %.

Expansion of OZ and Kiwi stores were on the cards for the previous 12 months with a Glassons opening in a new Westfield Mall 2 weeks ago in my local area. The store manager tells me it seems to be doing very well and foot traffic while I was there seemed to reflect the managers statement.

The Warehouse (WHS) New Zealand's largest retailer, has announced an annual net profit after tax of $115.5 million. Sales were up 2.4 per cent to $1.76 billion.

The profit included almost $20 million from asset disposal from which a 35c special dividend will be paid. There is to be a normal 5.5c dividend on top of that.

The Warehouse is in a state of flux at the moment. Expansion plans are on hold and ownership is in limbo as Foodstuffs and Progressive look to fight out ownership bids for the company in the courts early next month.

Both retailers will find the going tough for the medium turn, as high government spending has lead the economy into a tail spin raising interest rates and inflation.

Post 2008 election a new frugal, tax cutting regime will help stimulate this sector again.

Pumpkin Patch (PPL) the trendy global kids fashion retailer, will report Monday 17 September(NZ time) and judging by the spectacular fall in share price of the last several weeks insiders seem to know that the result isn't going to be pleasing.

Fonterra headed to a new Frontier?

As canvassed here a few weeks back the speculation about New Zealand's largest company being listed surfaced again this week.

Fonterra's brands business could be worth more than $4 billion if floated on the share market and analysts say it would be an eagerly awaited float.

Fonterra's brands business - including Anchor, Mainland and Tip Top - had an operating revenue of $4 billion.

This puts it above the scale of companies with similar strong brands, such as Goodman Fielder (GFF) which has approximate $2.5 Billion in sales.

With the NZX bereft of such large listings a partial float of Fonterra would give confidence to a sagging undervalued New Zealand stock market.

Good news and bad news for Fonterra this week.

Rachael Hunter, the girl form Glenfield and the Tip Top Trumpet ice cream girl from 22 years ago this week launched the Jellytip Trumpet, a fusion of two classics.

Pictures of Rach' licking the new cone shaped concoction immediately reminded one that perhaps Rod Stewart might have seen the original picture of the pretty 16 year old doing exactly the same thing all those years ago. He of course latter married her.

The bad news, the milk that they base most of their products on has been implicated (again) for causing health problems.


Stupid is as Stupid does

Alan Bollard, the Reserve Bank Governor, has left the official cash rate at 8.25% this week.

Just when he should be lowering the rate because of a downturn in the New Zealand economy, with international markets likely to cut interest interest rates ,Bollard sits on his hands.

Bollard's possum in the headlights, hand on the tiller approach didn't work when he was raising rates and now he appears to be riddled with confusion as to what to do next.

"...This would be offset by the sharp rise in dairy prices and the decline in the New Zealand dollar in the past month..."

So he was critical of the Dairy industry when using it as an excuse to raise interest rates and now he is expecting the same industry to get the economy going when he did the best he could to destroy it with the highest interest rates in the developed world.

Cant have it both ways Forrest.


The Song Remains the Same

Finance companies are in the news again this week.

Geneva Finance, the latest company to strike problems in the financial sector crisis, yesterday gave its trustee assurances about its financial fitness.

On Tuesday, Standard & Poor's put Geneva on negative "CreditWatch" saying it was having liquidity problems.

This writer cannot believe the amount of money being spent by this Finance company and others on saturation advertising trying to soothe prospective customers that their company's stability can be assured.

One could equate the quantity of any advertising of a particular company with the amount of trouble they might be in.

I certainly wouldn't come to that conclusion though-sound of one hand clapping.

Geneva insist things are hunky dory.

Jumping Ship at Telecom a good Call

Another Telecom (TEL) exec is about to head West. Telecom's CEO of its consumer arm, Kevin Kenrick, is resigning in December.

His departure follows the resignation of another senior Telecom exec, CFO, Marko Bogoievski.

Teresa Gattung was the first to get the heave-ho earlier this year when her dismal results as the CEO finally caught up with her.

Considering the pressure Telecom is now under because of Government regulation and the need to spend large capital sums replacing aging infrastructure it seems that head office has morale at the same levels as Telecoms dropping share price and future prospects.

The departures are well timed.

NZX Market wrap

The NZSX-50 index rose 20.25 points, or 0.5 per cent, to 4162.68 on turnover of $83.5 million.

It was a weak trading day which capped a week of the same slim trading.

Giant retailer The Warehouse(WHS) was flat at $5.95 after posting an annual net profit of $97.9m.

Clothing retailer Hallenstein Glasson(HLG) fell a cent to $4.59 after saying annual profit fell 1.3 per cent, to $21.4m.

Top stock Telecom (TEL)was down 2c at $4.35.

No 2 on the NZX board, Fletcher Building(FBU) increased on yesterday's 22c gain with a 14c rise to $11.99. Contact Energy(CEN) fell 2c to $8.97.

Fisher & Paykel Healthcare(FPH) was up a cent at 360, while F&P Appliances(FPA) rose 10c to 365. Auckland Airport (AIA)rose a cent to 311 with no more news of takeover talk, Sky City Entertainment(SKC) lost 2c to $4.38, and Sky TV(SKT) rose 17c to $5.60.

Air New Zealand(AIR) was up 4c at $2.29 ahead of a large dividend payout, Infratil (IFT)was up 8c at $2.80 and investment company Hellaby(HBY) was also up 8c, at $2.74.

NZX increased 15c to $9.75, PGG Wrightson(PGG) was up 2c at $1.78, Vector(VCT) the Auckland Lines company rose 5c to $2.58, and Tower(TWR) was up 5c at $2.25.

Going down were, Pumpkin Patch(PPL) was down 9c at $3.25 ahead of next weeks profit announcement, Nuplex(NPX) fell 13c to $6.97, Port of Tauranga (POT) lost 7c to $6.90, and Cavalier(CAV) was down 3c at $3.30.


c Share Investor 2007