Forum Archive Index - October 2000

["Jason ." <jasching@hotmail.com>]

Grant,

Very smart that you notice my email was sent by a 4 hour behind time zone
area.

Franklin Resources and other US investors were selling out NZ stocks
through out last year, despite the falling NZ dollar.

Well, I believe the kiwi dollar (the pacific peso!) will stay at these
historical lows (39-45c) along with the Aussie, Euro for a while. I don't
see any reason for it to rise substantially next year unless the US
market crashed in the near future causing the US dollar to slump
significantly. By the way, I really think the Dow is going to slump shortly, 
so the NZ dollar might have a rally soon. It makes more sense for the US 
investors
to sell off their assets when they are still worth something and to invest 
the money elsewhere for a greater return.  These money might come back only 
if the NZ economy shows real sign of growth, not rebounce for a few quarters 
and slumps again.

There are a few constraints with the NZ economy itself, such as a small 
market,
low population ....... The govt show really think of a good solution to
stimulate growth. Clearly, the 1993-96 expansion was solely driven by 
immigration, and nothing of this sort will ever repeat again after the Asian 
crisis. The
expansion - caused solely by a sudden demand for houses, cars ...... in a 
small
economy.

Don Brash, I should say the Reserve Bank policy should be blamed. Back in 
1996
when everywhere in the world was having a boom, the reserve bank was putting
up interest rate to keep inflation down to 0-2%, and as a result, NZ missed
the boom. Don should aware that the fundamentals in NZ are never as strong 
as
the US. It takes much longer time for NZ to grow than going into a 
recession. I wonder how much 'growth' would NZ left with if there was no 
immigration
boom in the 90s. In addition to that, the management of NZ listed companies 
is never first class, that's why the sharemarket is always undervalued. The 
latest case with FEG is a good evidence of that, Bad management has wasted 
billions of Kiwi's money in the past 10 years!!!

What's happening now is that after years of up and downs, foreign investors 
are totally disappointed with NZ. Therefore, they sold off whatever they had 
when they are still worth a cent.

Good Luck to NZSE, NZ shareholders and NZ!!

Jase

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