Forum Archive Index - December 1999

["Nigel Varey" <nigelv@clear.net.nz>]

well said!
i live in hope for the day when we become the eastern state of australia.

merry xmas to all

-----Original Message-----
From: Mark Hubbard <mhubbard@es.co.nz>
To: sharechat@sharechat.co.nz <sharechat@sharechat.co.nz>
Date: Thursday, 23 December 1999 14:24
Subject: [sharechat] Hostile Investment Enviroment


>The following are obviously my personal opinions.
>
>After the first two days of Parliament sitting it is now evident that the
>govt. is far more left than centre - ie, far more anti business (only a few
>days after the election Clark was bagging the salaries paid to executives
in
>NZ bigger public companies in the CHCH Press). One particularly worrying
>aspect, other than the idiocy of renationalising ACC, is the news that
>Cullen is now looking at the corporate (and trustee) tax rate (ie, he's
>finally woken up to the fact that the 39% tax rate will be avoided (and
>quite rightfully so)). This bodes very badly I feel for the NZSE, coming as
>it does on the same day that Germany has announced that it will be lowering
>its corporate tax rate to 25%, and also given the OECD trend toward
lowering
>taxation rates due to the  many studies now that demonstrate that higher
>taxes diminish savings and growth, and cause business to become less
>competitive.
>
>NZ now has a lot higher taxation, overall including the indirect taxes,
>than, I suspect, virturally all of its major export markets - given this
our
>export companies are going to become uncompetitive and will struggle as
much
>as those with domestic markets (which in my opinion will ultimately be
>stifled in the vice of regulation). (The exporters one boon may be the $NZ
>going south as overseas investors wake up to what is going on here - but
>this will not make up for the increasingly anti competitive environment
that
>will be created here through higher taxes and procedual regulation).
>
>I personally believe that the much higher political/economic risks that are
>quickly becoming evident have not been factored into the NZ stock market.
>
>For these reasons I personally have started considerably re-weighting my
>investment portfolio. Pre election I had a policy of 40% to 50% of my
>portofolio being outside NZ (across all asset categories, fixed interest,
>property, equities, + a small portion of currency and commodity trading
>funds) - I may now look to up to 70% to 75% being invested in overseas
>markets - mainly through UK Investment Trusts. The already mentioned likely
>fall to occur in the $NZ over the next three years alone would make this
>look attractive.
>
>With regard to the money I do leave here, it is hard to think of what
public
>company investments to keep. The two logical ones are Restaurant Brands and
>Warehouse, although even the Warehouse could have trouble if tarrifs start
>to be strengthened/reintroduced - and given the last two days, all bets are
>off. I will also of course keep my investment in Fernz which has very
little
>NZ exposure, and Ryman has done so well for myself, that I may well keep it
>also.
>
>Anyway, I would be interested in other people's picks of 'safe harbour' NZ
>companies, as well as NZ vs Overseas portfolio weightings.
>
>[Ben, I apologise for the political nature of this posting, however, I do
>believe that the issue of political risk has come to the forefront of
>sharemarket investment here now. If you do not want this topic discussed,
>then it's your forum so I'm sure you'll let us know. Regards]
>
>
>
>
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