Forum Archive Index - January 2000

["hugh webber" <hugh.webber@clear.net.nz>]

as an economist I can't quite follow some of that Vincent. I don't think
anyone is predicting savage interest rate increases, just modest ones and
inflation still seems to be dead. The oil price rise is a special case and
not due to excessive demand.
Now that Nuf is domiciled in Australia, only 10% of its sales in NZ and 45%
in Europe I don't see that they're really worried about what happens to the
NZ dollar against the green back.

People are probably excessively worried about gearing in the aftermath of
1987 in NZ; if they have made good strategic profitable investments then
the increased gearing to 66% (which doesn't seem dangerous to me) will
increase their profits more than statically sitting on a 30% gearing going
nowhere. In any case large overseas bankers wouldn't have lent the money if
they didn't think it was a good idea and there would have been noises about
breaching covenants and insufficient interest cover and forced sale of
assets if there was a problem.

Disclosure: I held Fernz shares until July last year - until before the big
Fernz dip, but I'd buy some now if I wasn't fully invested already
elsewhere.

P.S. Good on ya Phil, keep it going, treat yourself to a decent meal.
Wasn't it great to see David Zwartz score that beauty over Contact, small
shareholders have been dreaming of that sort of coup for 10 years.
As for seeing an Australian Nuf executive caught with a sheep in Oz it
would serve the ratbag right for delisting from NZ.  


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