Share Investor: November 2007

Friday, November 30, 2007

The Warehouse in play

The decision by the High Court to grant a positive decision to the appellant's Woolworths Australia [WOW.ASX] Foodstuffs and itself will make the coming months for the company very interesting.

The High Court decision to allow Foodstuffs and Woolworths to make bids for The Warehouse Group [WHS.NZX] means it is just the beginning of a long process of a bidding war, possible legal wrangles by the Commerce Commission should they wish to appeal the High Court decision in the Appeal Court and difficulties for either Foodstuffs or Woollies to get the required 90% stake for a takeover.

Both Foodstuffs and Woollies own 10% of shares each and they require at least 90% of shareholder approval to make a takeover successful so both companies could block their rival bids. Considering founder Stephen Tindall has a 51% majority, it is definitely up to him and his family interests to sell or not should bids be made.

It is possible that the difficulties of gaining a 90% approval could be got around by organising a complicated "takeover" structure in the guise of a "merger", as was done when Transpacific Waste effectively took over Waste Management in 2005. Only 75% shareholder approval is needed in this scenario.

At today's AGM shareholders were told that the company had strong cashflow and he dropped hints at a capital return to shareholders.

"In the absence of any major acquisition opportunity, the company will consider undertaking further capital management initiatives in the 2008 calendar year," Chairman Keith Smith

Little was said about a possible takeover and the main focus was on company performance for next year which was expected to be flat.

The bulk of sales for the company are made during the November /December Christmas lead up and look to be flat as well, due to high mortgage rates and petrol prices.

The positive news out yesterday led Warehouse shares up around 24% and by 5c to NZ$6.20 today.

Disc: I own WHS shares in the Share Investor Portfolio

The Warehouse Group @ Share Investor

Share Investor Q & A: Reader questions to Warehouse CEO Mark Powell
Share Price Alert: The Warehouse Group Ltd 2
Woolworths puts The Warehouse back on the shopping block
Share Investor's Total Returns: The Warehouse Group Ltd
The Warehouse Group Ltd: Takeover Speculation Resurfaces
Share Price Alert: The Warehouse Group Ltd
The Warehouse Group: Tips for the new CEO
The Warehouse Group: Should Ian Morrice Go?
Has the Warehouse lost its Mojo?
Stock of the Day: The Warehouse Group Ltd
The Warehouse Group Ltd: Takeover Prospect looking good on paper
VIDEO: Extended Ian Morrice Interview
Share Investor Q & A: Warehouse Group CEO Ian Morrice

Warehouse Group Ltd: 2010 Full Year Profit Analysis
Share Investor Q & A: Questions to The Warehouse' Ian Morrice
Long Term View: The Warehouse Group Ltd
Share Investor Short: Warehouse Group yield worth a look
The Warehouse Group: 2010 Interim Profit Review
The Warehouse: Big Brands, Big Opportunities
Warehouse strike opportunity to buy
Long Term Play: The Warehouse Group
Share Investor Short: Warehouse Group yield worth a second look
Woolworths supermarket consolidation an indicator of a move on the Warehouse?
Stock of the Week: The Warehouse Group
Warehouse 2009 interim profit a key economic indicator
When will The Warehouse bidders make their move?
Long vs Short: The Warehouse Group
Warehouse bidders ready to lay money down
The Warehouse set to cut lose "extra" impediment
The Warehouse sale could hinge on "Extra" decision
The case for The Warehouse without a buyer
Foodstuffs take their foot off the gas
Woolworths seek leave to appeal to Supreme Court
Warehouse appeal decision imminent
Warehouse decision a loser for all
Warehouse Court of appeal decision in Commerce Commission's favour
MARKETWATCH: The Warehouse
The Warehouse takeover saga continues
Why did you buy that stock? [The Warehouse]
History of Warehouse takeover players suggest a long winding road
Court of Appeal delays Warehouse bid
The Warehouse set for turbulent 2008
The Warehouse Court of Appeal case lay in "Extras" hands
WHS Court of Appeal case could be dismissed next week
Commerce Commission impacts on the Warehouse bottom line
The Warehouse in play
Outcomes of Commerce Commission decision
The fight for control begins soon

Discuss WHS @ Share Investor Forum - Register free
Download WHS company reports

Shop online at The Warehouse

NEW - From Fishpond.co.nz | Think Bigger, By Michael Hill

c Share Investor 2007 & 2009

Bitching and Moaning

There has been some moaning and bitching about this piece that I wrote on Political Animal and my Share Investor Blog regarding the conflict that Jeanette Fitzsimons and the Labour Government have over their championing of Windflow Technologies and a shareholding that Jeanette has in the company and her involvement in changing laws and stopping normal economic development to favour Windflow Tech.

I have been told by an anonymous individual and by someone else that calls herself Jeanette Fitzsimons that Fitzsimons no longer has shares in the company. Neither of these two persons were able to furnish any proof of such a statement.

I searched high and low to find any information to the contrary but common information from all sources on the net lead me to the same conclusion. My main source was from the Greens' Website.

Does Jeanette, a family trust or her family members own Windflow Tech shares? You would have to ask yourself this question considering her involvement in putting the brakes on oil, gas, hydro and coal energy and financially penalising those industries through her actions and those of her partner in Government, the Labour Party.

An interesting speech from Deborah Coddington related to the pecuniary interests of members of Parliament where she discusses some of the points that I have covered here and incidentally another source of little Jeanette's shareholding in Windflow Tech.

Coddington, Deborah, Standing Orders

2nd August 2005

[Volume:627;Page:22361]

DEBORAH CODDINGTON (ACT) : I rise on behalf of the ACT party to oppose Government motion No. 3, which relates to the pecuniary interests of members of Parliament. What is the problem that this is trying to fix? All this will do is be a burden for the honest, who will agonise over it. It is so complicated and so badly drawn up that it is very difficult to see where to begin and where to end. It will build a climate of dishonesty. The crooks, who do not give a stuff, will just make it up anyway—and who will have the time and energy to trawl through everything and find out whether members have been honest? It is like taking the rich list at face value. The rich list does not even take into account people’s liabilities. All it can do is take into account their assets. The poor, diligent, honest MP who struggles to declare everything under this measure will possibly trip up, or by accident exclude something, and the media will pick it up, have a field day, and destroy him or her for no reason at all.

This measure would not have caught Donna Awatere Huata. We asked her time and again whether she had any interest, any personal gain, and she lied to us. She would not tell us the truth. It would not have picked her up. If this Parliament really wants to get down on corruption, why does it not take note of what Ian Ewen-Street said yesterday when he talked about the scampi inquiry and Mr Peters’ involvement with Simunovich Fisheries? That has never been fully explored. For instance, provision 4(1)(b) in new appendix B states: “the name of every other company or business entity in which the member has a pecuniary interest …”. Is that direct or indirect? What if a member had shares in something like the New Zealand Investment Trust? That is a very respectable trust. If a member had shares in it, he or she would not have a clue about all the things that trust does. How on earth would one list them? How would trusts like that be listed? Land holdings are mentioned further on in this measure. If we tried to get information from members on all the land and property they own they would probably tell us to go away and mind our own business.

I was very interested in what Rod Donald, the co-leader of the Greens, said. A moment ago he said that the Green Party stood for high standards and that it was the cleanest party in Parliament. They would have no trouble declaring their pecuniary interests. Why does Rod Donald not start by reading what we already have under Standing Order 164, which states: “A pecuniary interest is a direct financial benefit that might accrue … as a result of the outcome of the House’s consideration of a particular item of business.” The Greens have a particular interest in high electricity prices. They opposed Project Aqua. They oppose any energy projects. Why is that? Because it is in their pecuniary interests to have high electricity prices, because of their financial interests, through their taxpayer-funded superannuation fund, in establishing the commercial viability of wind energy. They should tell us these things. If they do not tell us these things we have to go into Google to find them out. This statement is from a press release in May 2001: “the Green Party’s Superannuation Fund have joined the growing list of investors in local wind power company Windflow Technology. Windflow director … said ‘We’re delighted that the Greens are going to be part of our company. Windflow Technology is both environmentally and investor friendly,’ … Rod Donald, said ‘Our superannuation fund has a policy of ethical investing.’” Why do they not declare that when they come into this House to argue against any power project or development that anyone cares to put up, whether it be State-owned, or, heaven help us, one of the few private ones? Not only that, Jeanette Fitzsimons owns 30,000 shares in the Green Party superannuation fund. She is one of the top 10 shareholders. One of the biggest shareholders is UK millionaire, Sir James Goldsmith, and US billionaire Delane Wyeross also owns shares.

But they have directly benefited also from carbon credits. A subsidiary of Windflow Technology, New Zealand Windfarms, won Government backing of up to $10 million to set up a 60-turbine wind farm in the Manawatū. This was in December 2003. Members should listen to what the business development manager—[Interruption] It is not a scandal at all. I never said it was a scandal. I am just pointing out the—we are not allowed to use that word, but the term “conflict of interest” perhaps is a way to describe it when one stands up in this House and says that everyone has to declare their pecuniary interests, and everyone has to declare how much money they are owed over $50,000, and any debt over $50,000. I do not see the point in that. Why have it declared that someone owes a member of Parliament $50,000 or more?

Members will not have to declare it if it relates to a spouse, a partner, children, step-children, or foster children, so the dishonest ones will put all these things in the name of their spouses, partners, children, step-children, or foster children and get them to pay them. The very thing that should be declared, and the very thing we should be most suspicious of—that is, electoral campaign expenses that could be covered up—is excluded. The very thing we should be suspicious of—where someone wants to try to buy one’s vote—is the only thing that we should be declaring, and it is excluded.

But I go back to this Greens’ thing. The business development manager of the wind farm said that it would not have been viable without the Government’s award of carbon credits. It was one of the two firms named by the Minister of Energy, Pete Hodgson, to take a share of 4 million carbon credits designed to cut greenhouse gas emissions. I think the public should know these things. The public should know that the Greens stand up in this House and accuse every other party, except Labour, of being dishonest and bordering on the corrupt, yet the co-leader of the Greens did not declare all of these things, which anyone can get on the website. The Greens are strangely silent whenever anyone brings the matter up, and it is an example of how this legislation is just a nonsense. There is no problem here that we have to fix. In general, most people who come into this place are honest. If they are not, then the media are not doing their job properly, because it is the job of the fourth estate to find out what is going on and report it accurately. ACT will not be supporting this motion.

C Political Animal 2007

Thursday, November 29, 2007

15 year old Kristen Byrne's take on "Global Warming"

A message for all our dopey politicians about New Zealand's moronic march towards self imposed economic disaster in the form of bending over to global warming, carbon footprints, Kyoto and Al Gore's growing bank balance.

The Left and the Greens especially, have us on a path, to NZ before the wheel was invented.

In case you haven't found it yet, let me recommend 15 year old Kristen Byrne's insightful website, Ponder the Maunder that puts all the GW bullshit into perspective.

Ponder the Maunder was an extra credit project for Honors Earth Science, Portland High School, by Kristen Byrnes of Portland Maine.

This report is a comprehensive look at the global warming issue without financial or political bias. It uses the most updated information provided by scientists and researchers and interjects common sense, an important component missing from the global warming debate.

Related

Teenage Skeptic Takes on Climate Scientists : NPR

c Political Animal 2007

The Carbon Fairy has no clothes on

In what is clearly gearing up to be one of history's greatest financial explosions and implosion when it all inevitably collapses, is news today that the carbon trading "market" tripled in size to US$30 Billion last year.

With this market built on failed "science", lies and spruiking by the likes of wealthy green investors Al Gore and Leonardo Di Caprio, like all markets built on such flimsy backgrounds the money made, and there will be billions, will be made by those that get on the greenwagon first:

Since co-founding Climate Change Capital in 2003, James Cameron and his business partner Mark Woodall have turned their company into a powerhouse in the burgeoning global market in greenhouse gases. Driven by the Kyoto Protocol on global warming, an accord Cameron helped write, this corner of the derivatives arena is growing as never before.

Clearly, Cameron and Woodall are smart cookies but these self interested scam artists, who have written their own rules and now profit from them by "investing" other peoples hard earned cash into worthless carbon credits will be the first to withdraw their own funds when the climate change hysteria is revealed for what it is, that the sun simply getting hotter.

http://www.bbc.co.uk/norfolk/content/images/2007/02/02/carbon_footprint_400_03_400x300.jpg

A Carbon footprint recently traded on Ebay for
US$1 Million.

I am old enough to remember similar things happening during the dot com era where mum and dad investors piled into worthless "businesses" and the big boys got out first before the truth about the bulk of silicon valley Internet companies hit the investment fan.

The same thing is going to happen with the carbon trading market.

Related Share Investor Reading

Rod Oram: On the Prius to Obscurity
Another reason to ignore Rod Oram
Rob Fyfe's "Environmental Extremism"
Carbon Credit Trading puts markets at extreme risk
Mark Weldon Strikes out on Carbon Trading
Quote of the year
Of Tulip bulbs and Tooth fairies
Global warning: Tax iceberg ahead
Mark Weldon in two minds about carbon trading

Related links

Kristen Byrne : Ponder the Maunder - a 15 year old schoolgirl debunks climate change myth

From Amazon

	Global Warming and Other Eco Myths: How the Environmental Movement Uses False Science to Scare Us to Death by Competitive Enterprise Institute Buy used from: $3.77

Global Warming and Other Eco Myths: How the Environmental Movement Uses False Science to Scare Us to Death by Competitive Enterprise Institute
Buy used from: $3.77

c Share Investor 2007

Wednesday, November 28, 2007

Sky City sale could be off

The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
Buy new: $14.95 / Used from: $6.99
Usually ships in 24 hours

c Share Investor 2007

Christchurch March against EFB: Report

The piece below was written by Andy Moore and republished at Political Animal with his permission. From the NZ Debate Blog

Proving that even South Islanders have some passion left! Good on Andy and the rest there today.

Approximately 350 people turned out in Christchurch today for the march against the Electoral Finance bill. Starting at 1:00pm at Victoria Square, we followed Bob McCoskrie of Family First, John Boscawen and a Korean War veteran, winding through the streets of the inner city, on the way to Cathedral Square.

Two of us carried blank signs, reference to the fact that if the EFB passes into law, it may become necessary for people to protest with blank placards to avoid being fined or imprisoned simply for speaking out against the Government or a particular party!

John Boscawen spoke powerfully against the bill, and passers by stopped and joined the rally. Next, Bob McCoskrie brought people's attention to the seriousness of the bill - and also paid tribute to John for the time and money he has put into the fight so far. Then we heard from a lecturer from Canterbury University who's main and most excellent point was that...

"This bill makes it a lot harder for the challenger, and easier for the incumbent Government."

An excellent point, which only then really hit me. Of course, it is obvious that Labour is pushing this bill through as a last ditch attempt to steal the election in 08 - I just didn't quite understand how. But the statement above puts it pretty simply and accurately. I will be looking round for an audio version of his speech.

At about 1:30pm we finished up with a round of applause.

A table had been run at the starting point in Victoria Square, and then in Cathedral Square to gather signatures for the petition calling for a referendum on the question: "Should a smack as a part of good parental correction be a criminal offence in New Zealand?"

Click here (www.unityforliberty.net.nz) for more info on the fight against the oppressive new anti-smacking law, yet another arm of Nanny State.

Monday, November 26, 2007

Helen Clark and Jenette Fitzsimon's in conflict with business

Helen Clark, the Prime Minister of New Zealand, continues to have a problem with separation of her job from conflicts of interest and possible conflicts of interest.

Apart from the numerous personality, and socio-political conflicts she has in her day to day activities the topic up for discussion here is her and her Government's numerous conflicts of interest with the business world.

We have had recently Clark herself, Micheal Cullen and other Government Ministers interfering in Air New Zealand by making public statements that have affected the share price of the airline, likewise she and her Ministers erred again in 2006 when making inappropriate comments, on several occasions, about Telecom New Zealand that lost shareholders 100s of millions of dollars.

Most recently we have had Winston Peters, a Labour Government partner and lapdog making inappropriate comments in the media about influences they could use to stop the Auckland International Airport from being sold.

The most glaring example and probably least known, is the conflict that arises from Jeanette Fitzsimons from the Green Party and her major shareholding in the listed NZ windfarm owner , manufacturer and developer, Windflow Technologies.

Fitzsimons is a partner to the Labour Government and drives Labour's "Green Agenda" for them. Fitzsimons has been responsible for passing law and changing rules to give companies like hers an advantage over competitors and as a result she has financially benefited directly from her activities in Parliament. Jenette has a knack of forgetting to mention her large shareholding in Windflow Technology when dealing with such matters when doing Parliamentary business.

You cant get more corrupt and conflicted than that but she has a good role model for her modus operandi in Al Gore, but that is another story.

If we get back to Clark's role in this though, not only is her Government culpable in the conflict of interest by allowing Fitzsimons to feather her own nest but she has also been directly championing the company with financial, moral and media support for Windflow Tech.

Helen Clark with Windflow Technology
head Geoff Henderson,centre, and Derek Walker,
chairman of NZ Windfarms, at the commissioning
of NZ Windfarms' turbines near Palmerston North.

This sort of Parliamentary, legislative and Prime ministerial support for Windflow Tech is clearly a huge conflict of interest that shouldn't be allowed to continue, although we shouldn't be surprised by this sort of conflict as it is apparent at most of our listed companies: Tim Saunders at Contact Energy, Lloyd Morrison at Auckland Airport and a host of other rapscallions and rascals at a whole host of other listed companies.

The shareholders at Windflow Tech should be worried too.

Government interference, as outlined above, can also change to the negative at a whim, should policy, Government or thinking change.

We have to remember, as shareholders in companies, however small or large our holding maybe, it is our personal property rights that are at issue here. Interference from individuals, entities, whether Government or private have no more rights than you or me and their influence shouldn't be able to be subscribed to the extent that they can change laws to suit their own agendas and line their own pockets.

C Political Animal 2007

Fletcher's got game

http://media.apn.co.nz/webcontent/image/gif/012edednpark.gif

Artist impression of the new Eden Park

In a provisional decision, it has been announced today that Fletcher Building Ltd [FBU.NZ] has been picked as the preferred builder for the new Eden Park revamp, valued at anywhere between NZ$190 million and north of $300 million, depending on who you speak to.

The stadium is to be rebuilt for the 2011 Rugby World Cup and construction is expected to start in August 2008.

If Fletcher's can negotiate a good deal for them, it is going to be good for the company. I'm mindful though that many stadiums built around the world have caused construction companies much grief, as changes to design, construction problems, and political meddling has put profits at stake and even put company futures at risk.

The new Wembly Stadium almost sunk the Australian builder Multiplex last year and the company building the new Vector Arena in Downtown Auckland lost big dollars on that project.

It is more than likely that the big New Zealand construction company will win the bid as it has the size and experience to be able to complete the project

Grab your seat for the game, Fletchers could be in for a bumpy ride.

Fletcher Building @ Share Investor

Fletcher House built on hard times
Fletcher Building down tools in the short term
Why did you buy that stock? [Fletcher Building Ltd]
A solid foundation for the future
Fletcher Building raises profit through canny management

Related Reading

Fletcher Building History - Auckland University

Fletcher Building Financials

Helen Clark and Jenette Fitzsimons knee deep in Windflow Technology conflict

Helen Clark with Windflow Technology
head Geoff Henderson,centre, and Derek Walker,
chairman of NZ Windfarms, at the commissioning
of NZ Windfarms' turbines near Palmerston North.

Christchurch Electoral Finance Bill protest , Wed 28 Nov, 1.00pm

The Auckland EFB march Nov 17, 2007

Protest March Victoria Square to Cathedral Square Wednesday 28 November 12.30. March starts 1.00pm. Organiser of the Auckland and Wellington marches John Boscawen will speak.

Get ready citizens of the South, it is now your turn to march against this attack by the sisterhood on your democratic rights to free speech and your right to criticise any sitting govt be it snivelling Lefties, National, Greens or any other colour of politics.

The passing of the Electoral Finance Bill into Law next month means your right to freely do that in election year will be removed.

I will not be able to legally write this blog!

The Greens said last week that this bill would allow more free speech. That ladies and gents is a bald faced lie, just like the one told by Helen"Teflon" Clark and Sue "I'm so cute" Bradford that the repeal of section 59(or the anti smacking bill) earlier this year wouldn't lead to parents being charged for smacking a child on the hand for being naughty, it has happened in a number of cases already.

Get out there Canterbury and protest for your right to protest against a Government that want to silence your voice.

Speak up before it is too late!!

C Political Animal 2007

Friday, November 23, 2007

Share Investor Friday free for all: Edition 12

Fat Prophets

There have been some good company results out this week. Ryman Healthcare had a 20% rise in profit for the last half year and forecast another strong year in 2008, while Fisher and Paykel Health half year profit was down sharply because of repatriated funds in US dollars lower due to the weak US currency but sales and profitability before currency exchange were up strongly.

http://www.headliner.co.nz/images/Ryman_Healthcare.jpg

Part of a Ryman Healthcare Village

Earlier this week, Mainfreight half year profit rose around 9% before abnormals and future guidance gave investors positive encouragement for their investment in the company.

OK, OK, so I'm blowing my own trumpet because I own shares in all these companies? Well, Yes and No.

While individually these 3 companies are doing well, with rising sales, profits and good future profits indicated, as a group they show that New Zealand listed companies are still doing well, despite all the international drama of market turmoil, rising oil, mineral, commodity prices and Al Gore putting his carbon footprint in his mouth again.

Investing long term in good companies always beats the likes of trading carbon fairy dust!

I'll be baackk

The Loan Terminator, Governor Arnold Schwarzenegger, is back in the news again this week, in a sequel to his Terminator movies that would have him eliminate Californian home loan debtors the pain of repaying their sub prime mortgages at normal interest rates by making the sweetheart deals they initially signed up for extend for a period of up to seven years.

http://img.timeinc.net/time/2007/villains/images/schwarz_land_page.jpg

The Governator terminates debt while
looking cool at the same time.

The bulk of these "sweetheart" deals at very low interest rates were due to be recalculated in several months time but 3 lending institutions who have exposure to 25% of sub prime loans, Countrywide Financial Corp, GMAC, Litton Loan Servicing and HomEq Servicing, seem to have convinced Arnie that eliminating the inevitable collapse of borrowers next year and putting it off till 2014 is a great idea.

As I have ranted on before, these individuals, as sad as it is, simply need to bite the bullet and face the music now, instead of slowly dragging down the rest of us with them.

Arnie needs to go back to Hollywood and fight the bad guys not Terminate borrowers' and lenders' responsibilities to face their own debt woes.

Terminator 4 anyone?

The carbon fairy has no clothes on

In what is clearly gearing up to be one of history's greatest financial explosions and implosion when it all inevitably collapses, is news today that the carbon trading "market" tripled in size to US$30 Billion last year.

With this market built on failed "science", lies and spruiking by the likes of wealthy green investors Al Gore and Leonardo Di Caprio, like all markets built on such flimsy backgrounds the money made, and there will be billions, will be made by those that get on the greenwagon first:

Since co-founding Climate Change Capital in 2003, James Cameron and his business partner Mark Woodall have turned their company into a powerhouse in the burgeoning global market in greenhouse gases. Driven by the Kyoto Protocol on global warming, an accord Cameron helped write, this corner of the derivatives arena is growing as never before.

Clearly, Cameron and Woodall are smart cookies but these self interested scam artists, who have written their own rules and now profit from them by "investing" other peoples hard earned cash into worthless carbon credits will be the first to withdraw their own funds when the climate change hysteria is revealed for what it is, that the sun simply getting hotter.

Artist impression of the new Eden Park

In a provisional decision, it has been announced today that Fletcher Building has been picked as the preferred builder for the new Eden Park revamp, valued at anywhere between NZ$190 million and north of $300 million, depending on who you speak to.

The stadium is to be rebuilt for the 2011 Rugby World Cup and construction is expected to start in August 2008.

If Fletcher's can negotiate a good deal for them, it is going to be good for the company. I'm mindful though that many stadiums built around the world have caused construction companies much grief, as changes to design, construction problems, and political meddling has put profits at stake and even put company futures at risk.

The new Wembly Stadium almost sunk the Australian builder Multiplex last year and the company building the new Vector Arena in Downtown Auckland lost big dollars on that project.

Grab your seat for the game, Fletchers could be in for a bumpy ride.

NZX Market Wrap

The benchmark NZSX-50 index, which yesterday ended below where it started the year, close up 16.8 points on 4071.0.

Turnover was light at $71 million.

"The over-riding theme was one of extreme caution," said ABN Amro broker Matt Willis. While value was starting to emerge, there was no rush to buy. Investors remained risk averse due to the US subprime mortgage crisis, which he said was a bi-product of weakening economy.

On the local scene, results of export stocks this week revealed the lagged impact of the high dollar was starting to hurt as currency hedges ran out. Companies were concerned about higher costs.

"Operating conditions are less than positive and that has followed through into sentiment."

However, retirement village operator Ryman Healthcare picked up 2c to 207 after reporting a 22 per cent lift in half year net profit after tax to $34.7 million.

No.2 stock Fletcher Building pared its morning loss to 5c, ending on 1175, after it was confirmed as the prime contractor to revamp Eden Park.

No.3 Contact Energy finished 4c up on 889.

NZ Oil & Gas eased back 2c to 110, having traded up to 113 in the morning, after gaining 11c yesterday on news estimated oil reserves for the Tui field had increased 30 per cent to 41.7 million barrels. That was worth an extra $200 million to NZOG, over time.

Sky City ended unchanged on 518 with possible bidders expected to show their hands early next week. However, share action suggests the market does not hold high hope for high offers.

Australian stocks mostly had a good session despite uncertainty surrounding tomorrow's election result.

Lion Nathan, which on Wednesday reported a strong result with good prospects for 2008, closed up 60 at 1100.

Goodman Fielder recovered some of its recent losses with a 9c gain to 230.

NZPA

NZ Dollar Wrap

Reuters currency rates

5pm today 5pm yesterday

NZ dlr/US dlr US75.62c US75.46c
NZ dlr/Aust dlr A86.25c A86.41c
NZ dlr/euro 0.5060 0.5074
NZ dlr/yen 81.60 82.10
NZ dlr/stg 36.47p 36.53p
NZ TWI 69.31 69.42
Australian dollar US87.64c US87.36c
Euro/US dollar 1.4942 1.4870
US dollar/yen 107.89 108.84

Disclosure: I own Fletcher Building, Ryman Healthcare, Fisher Healthcare and Mainfreight shares

C Share Investor 2007

Thursday, November 22, 2007

2nd Auckland EFB Protest(UPDATED)

Auckland march protesters 17 Nov, 2007

There is another protest march against the Electoral Finance Bill planned for December 1 2007 in Auckland.

The march kicks off in Aotea Square at 2.00pm heading off down Queen St to Britomart.

It is being organised once again by John Boscowan.

There is also to be a march in Christchurch Wednesday November 28 2007, details to follow.

C Political Animal 2007

Border's decision an indicator for Warehouse takeover outcome

A very interesting decision by the NZ Commerce Commission on Tuesday to give Whitcoulls the go ahead to buy the Borders book chains in New Zealand and Australia.

http://www.aucklanddailyphoto.com/wp-content/uploads/2007/04/a24042007.jpg

Border's Auckland Queen St Store

Given this outcome one could be forgiven for not thinking that either Foodstuffs or Woolworths should be able to get similar approval to buy The Warehouse chain. when a decision in the appeal to the High Court comes to light.

The approval for Whitcoulls to buy the 5 store chain in NZ is a similar scenario to the possible Warehouse buyout.

In Whitcoulls you have a dominant player wanting to takeover the superstore format that Borders is modelled on even before it has been given a chance to flourish under another independent player. Paper Plus is another dominant NZ player that is also interested. Dymocks, with quite large format stores and a much NZ smaller business has dropped out of the running for some reason.

Dymocks would have been the natural partner for Borders in NZ simply because of its small size.

As has been covered ad nauseum, Foodstuffs and Woolworths twin bids for The Warehouse are being made by two dominant grocery players in New Zealand and the Warehouse has recently kicked off development of a superstore format along the lines of Walmart's "supercenters" that include grocery lines and with three of these stores the format is in its infancy.

In Auckland City CBD the purchase of Borders by Whitcoulls will allow the combo company almost a monopoly in the superstore format, with the Whitcoulls store only a block away from Borders, you will see price rises for stock. In the rest of the country Whitcoulls and Paper Plus dominate the book and stationery industry.

If you use the CC rationale for allowing a Whitcoulls or Paperplus buyout of Borders and apply it to a possible Warehouse takeover by two dominant grocery players the similarities are spookily parallel ones. The Warehouse extra format is in its infancy, as is the Border's format and allowing Foodstuffs or Woolworths to purchase would by the CCs own standards be acceptable.

The nub of the Commerce Commissions argument in the Borders case seems to be that their large format stores don't lessen competition in the hands of a dominant player, so the same measuring stick must be applied in the Warehouse decision before the High Court. Extra format stores are unlikely to be a threat to other competition if purchased by a dominant player if you apply the Borders decision or they cant be much of a threat in themselves as a successful format in anyones hands. Therefore a positive outcome must be applied otherwise consistency in decisions at the Commission will be threatened.

The wait and outcome will be interesting and the High Court have a tough decision to make. However, they must apply the same rules to the Warehouse decision as the Commerce Commission have made this week in regard to Borders.

Disclosure: I own Warehouse shares

C Share Investor 2007

Wednesday, November 21, 2007

Auckland Airports new directors must focus on shareholders

After yesterday's vote at Auckland International Airport [AIA.NZ] AGM a number of the original board was gone and replaced by a motley crew of local politicians, individuals with axes sharpened and ready to grind and a couple of incumbents only just scraping in.

The amount of mud slinging by the current elected directors aimed at each other in the media recently could well leave one thinking that turbulence in the board room will be de rigeur.

Individual agendas are likely to be the order of the day, with newly elected Lloyd Morrison the person with the most to gain. Through his company Infratil [IFT.NZ] and a partnership with the NZ Super Fund, Morrison owns around 9% of AIA. He also owns a majority stake in Wellington Airport and is behind the proposal to build a second airport in Auckland.

Morrison's conflict of interest is clear but his agenda isn't. He made a bid for the Airport earlier this year at a share price of less than what Dubai Aerospace was prepared to pay but said in the meeting yesterday that NZ companies had been "undersold in the past".

Auckland businessman Richard Didsbury, a director nominated and acting on behalf of Auckland City Council and John Brabazon, nominated by Manukau City Council but now stood down, are two individuals with political direction with Didsbury acting on behalf of his council to keep the airport in "New Zealand hands", whatever that means because it is currently a publicly owned company with shareholders living in many countries and Brabazon still possibly imbued with Manukau's don't sell at any price strategy.

Chairman John Maasland is going to have a difficult job getting anyone to agree on a single defined direction for the company as it goes forward because they all seem to have their own ideas as to where the company should go. Ego has raised its ugly head in the lead up to the directorship elections yesterday but it has no place in the board room.

What these individuals seem to have forgotten is that there are shareholders out there who haven't had decent representation over the last 6 months or so during a possible sale of the company. The 2 offers that were turned down outright by the board, Dubai Aerospace and the original Canada Pension Plan scenario should have been put to shareholders and then put to the vote.

Instead directors fell to local and national political interference and public opinion when the property rights of AIA shareholders should have been given preference for it is they who own the company.

The new board need to keep this uppermost in their minds every board meeting and business dinner and lunch that they have.

Disclosure: I own AIA shares

Auckland International Airport @ Share Investor

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