Saturday, February 13, 2010

NZX sneaks out embarassing carbon disclosure after dark

In an announcement sneaked out after market close on Friday 12 February (the day traditionally used by companies to hopefully hide embarrassing and bad news) The New Zealand Stock Exchange Ltd [NZX.NZ] has indicated that it has had to write down the value of a "performance payment" from the sale of its carbon registry, TZ1 last year.

Curiously the NZX valued this payment at $ US 37.1 million (seems quite arbitrary considering there is no set "value" for a "carbon credit") but have now decided to write this down to another arbitrary figure of US$21.4 million.

So, the NZX have been winners and losers in the carbon credit lark. They sold to some poor sucker at the height of the scam and lost out by missing on a performance bonus.

An interesting finish to the NZX release today:

In spite of tough operating conditions, the TZ1 registry business continues to lead the field in customer acquisition worldwide. As such it is very well-placed to benefit when the carbon agenda, and corporate willingness to commit voluntary spend in this field, return. The past 12 months was a planned, intensive growth phase for the carbon registry business, and that growth has been slowed by macro headwinds. NZX remains confident around the long-term success of the this business.

They admit that the carbon trading business is an "agenda", it is indeed one of those, a political one used by people like the folk at NZX to make money from thin air but they say they are also confident that the business will be a long-term winner.

I would have to argue again that this statement seems a little confusing because they sold TZ1 in the first place and it also looks to be collapsing into itself in a heap of smelly shareholder losing red ink on the NZX balance sheet.

I have to say, in terms of disclosure by the NZX and Mark Weldon, to be this sneaky about releasing this information, it sets a very poor example for the listed companies that it manages on behalf of shareholders and goes to show when you mess with an "investment" that is based on fraud and when you don't understand that investment, you can quickly come unraveled.

NZX shareholders are the big losers here and there will be more losses to come as carbon trading continues to unravel.

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

Recommended Fishpond Reading

Crisis: One Central Bank Governor and the Global Financial Collapse

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