Forum Archive Index - April 2000

[ril <ril99_99@yahoo.co.uk>]

NZ public companies are destroying value except in particular Telecom
which has monopoly profits ($500 m per year from a recent article sent
to me). The banks also make monopoly profits but they are now owned by
Australians and British. So do the oil companies and several others.

However, back to the public company destruction of shareholder value. I
believe this is over $15 bn in the nineties.

This is an enormously important figure. Stunningly important. What this
means is that the large part of your economy does not make sense and
survives on the charity, some would say gullibility of the investing
public/institutions be they foreign or domestic.

When value is being destroyed like that, capital has few choices. It
either must search out monopoly industries or it must leave a country.
If it leaves employment and standard of living must fall.

I am as sorry as anyone else for what this means for the future for New
Zealand but it would be an unwise investor who kept his funds in a broad
range of NZ listed companies. Not only will these companies probably
lose value but they will also suffer from a progressive down-rating of
the NZ dollar.

Unfortunately, you currently have a government which I do not believe
understand the complexities and threats facing your economy and are
happy to listen to a uncreative mantra coming from treasury and the
reserve bank (note lower cases).

>From what I have read of this government they are focusing on social
engineering rather than the economy. 

The issue of a transtasman currency also, I feel, is a cop-out. National
airlines are a source of pride in most countries. You have just sold
most of yours. A currency should also be a source of pride and the
suggestion that you surrender yours to the Australian Reserve Bank
should be abhorrent. Make no mistake, NZ will be only a junior partner
in such an arrangement.

It is especially worrying seeing the sale of NZ assets overseas. Most
other countries, despite globalisation, act in their own interests. Your
politicians seem to have abrogated any interest in this process. Is it,
I wonder, through no understanding of the issues? Or are there more
sinister manipulatory forces at work?

However, without control of your assets and with a large pool of
unemployed you are really at the mercy of foreigners who have little
regard, if history is any indicator of the aspirations of NZ'ers.

Like Gallipoli you will become labour cannon-fodder for corporates who
send you to the front for your disposability (read low labour cost).
This is very sad.

All of the above IMHO but I reckon you guys really need to think about
these issues.

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