Forum Archive Index - December 2000

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

Must read it but a couple of quick comments.
Warren Buffett is not enthused about the value of
new issues to investors and apart from the odd 
case which absolutely twists your arm behind
your back to make a big profit like Telstra a couple
of years ago I'd have to agree. 
There are quite often tables of how new issues have
gone in media articles and mostly its badly and as
for the ones that have gone well the average investor
can get bugger all of them unless they have inside
connections. And there's plenty that have gone well
to start with then turned belly up and out and out 
losers like our friend Beauty Direct etc.
I was under the impression that the Australian 
corporate tax rate is now higher than NZ's and that 
our present Labour government is refusing to do anything
sensible about this. They have this ingrained philosophy
that they know how to spend our own money better than
we do and that they know how to spend business sector
taxes on business investment better than the business
sector does and that attracting and/or retaining business
in New Zealand is not something they want to know about 
or be involved in.
I think your professional pessimism is rather overdone RIL,
we have a promising export led boom (at least in Canterbury)
which is now threatening to be choked by international
speculators pushing up the value of the $NZ under the
impetus of comments by international finance and investment
houses about how well NZ is starting to do.
And before the Labour government hastens to claim credit for 
this I'd point out its due to the lower NZ dollar and that its
in spite of rather than because of Labour's ant-business moves
i.e. it would be stronger without them.
I have an open mind on the ASX/NZSE merger but I can't see
any marked benefits to the average investor and it seems 
such a clumsy awkward beast when there are two different
currencies involved. If it ain't broke don't fix it. Maybe the only
benefit will be to the owners/about to be owners of the NZSE
which isn't the average investor and I note the London exchange
was sensible enough to decline the first offer that came along
even though it was in effect something for nothing for the owners.
There isn't actually an immutable law anywhere that says
New Zealand is not allowed to have its own stock exchange....
and there are masses of similar sized advanced countries that
do.....there seems to be a lemming like rush here for some reason.

cheers,
Hugh



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