Tamsyn Parker 's Opinion

Tamsyn Parker is the NZ Herald's Money Editor

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Photo / Getty Images

Virgin Australia's passenger number performance across the Tasman should have one New Zealand shareholder smiling.

Air New Zealand has built up a stake of just under 20 per cent and reports say Virgin has for the first time over a 12-month period carried more domestic passengers than Qantas, excluding that airline's QantasLink and Jetstar subsidiaries.

Virgin has been aggressively targeting Qantas' lucrative business market with new lounges and improved services in planes.

Before its Virgin investment last year, Air New Zealand assessed setting up in the Australian domestic market but decided against it because it could have provoked a price and capacity war and would have lost the airline big money before it established a foothold. It also mulled taking equity stakes in Qantas and Tiger Airways before deciding on Virgin and getting the equivalent of 12 to 15 aircraft in the Australian domestic market from day one.

DIVERSITY RULE TOO WEAK

The New Zealand Shareholders Association has taken a swipe at the NZX, saying the stock exchange operator has not gone far enough with its new diversity rule.

The new rule will require listed companies to publish in their annual reports the gender composition of their boards and senior management.

They are not required to have a formal diversity programme, but companies that do have one will have to report on its progress.

Shareholders Association director Gayatri Jaduram said it was disappointed the new rule did not reflect diversity in a "wider sense".

"Ethnicity, for example, may be a relevant diversity consideration, as would be board tenure, range of business experience, gender and educational and occupational diversity," the association said.

Jaduram said the association was also disappointed the NZX did not make it mandatory for listed companies to have a formal diversity policy.

SHARPER FOCUS

Auckland Airport and Mighty River Power chairwoman Joan Withers says the new rule is a positive first step in increasing gender diversity in listed companies.

"I think it will focus the minds of companies that have been tardy in addressing the issue," Withers said.

"I'm hoping that evolution starts to kick in now and we do see some real progress."

Auckland Airport this week announced it had appointed a second woman director while state-owned Mighty River has four women on its board.

"The women I know that sit around the board table with me can hack it on any dimension around corporate governance - they're strong contributors across the whole range of corporate governance issues," said Withers.

NO PLACE ON THE TEAM

Listed mobile radio company TeamTalk's annual report shows it's at the cutting edge of gender disclosure (see below).

SWINGS & ROUNDABOUTS

The partial sale of power companies has one analyst warning about the long-term outlook for retail power margins. That may be good news to long suffering domestic consumers but bad news for gentailers - those which generate and sell on the retail market - being bought by those same "Mum and Dad" householders aghast at near constant power price rises over the past few years.

Morningstar's Nachi Moghe analyses power firms already listed - Contact and TrustPower - and says the red hot retail market will remain competitive for the next few years given two big geothermal plants are coming onstream in 2015.

"There's so much capacity that has been added over the last four years or so that there's a lot of oversupply in the industry. Despite the higher wholesale prices because of low lake levels right now you're going to continue to see prices depressed. It's good for consumers but for companies they're going to have to tough it out on the retail front."

WARM PROPERTY

DNZ Property Fund said leasing transactions in the March quarter have increased its contracted annual rentals by 0.6 per cent and lifted its weighted average lease term to 5.6 years at June 30 from 5.4 years three months earlier.

In its June quarter portfolio update it said it had completed 33 lease transactions in the three months, increasing net contracted annual rentals to $58.6 million from $58.2 million.

It said its leasing activity during the first quarter of the financial year had halved the portfolio lease expiry to 4.7 per cent of the portfolio contract rental in full-year 2012 and reduced full-year 2014 to 7.7 per cent.

DNZ shares closed up 1c at $1.47 down from their record $1.50 in May. The shares have been trending higher from the year low of $1.17 in August last year.

INFRATIL BONDING

Z Energy - half owned by Infratil - wants to raise as much as $150 million through a retail bond issue to repay debt and general expenses.

The company will open the offer on July 18 for $100 million seven-year bonds with the ability to accept oversubscriptions of up to $50 million, and will close on August 10.

The sale comes after two successful offers where Z Energy raised almost $300 million. The fuel retailer is yet to announce the bonds interest rate.

"The net proceeds of the bond issue will be on-lent to Aotea Energy Limited to use to repay currently drawn debt on the revolving core debt facility, and for the Z Energy Groups general corporate purposes," the company said.

TrustPower, controlled by Infratil, is also considering issuing bonds.

The power company wants to raise as much as $125 million of bonds and roll over existing debt to repay maturing bonds and for working capital.

TrustPower is considering a $75 million public bond offer, with the ability to accept a further $50 million in oversubscriptions, and will seek to roll over as much as $75 million of debt maturing in September.

NO WORD FROM RIO

Petrobras, the Brazilian oil giant exploring off the tip of East Cape, has activated the cone of silence around its work in New Zealand.

The company has refused to respond to repeated requests for an update on their work here in the wake of a High Court ruling which upheld the Raukumara Basin permit process and whether the challenging environment in Brazil is affecting its plans in other parts of the world, including New Zealand.

The Rio de Janeiro-based company is having to tip in hundreds of millions of dollars more into its deepwater field work off Brazil's coast at a time when production from its existing fields is falling faster than expected.

Its share price has tumbled by close to 30 per cent since its record- breaking US$70 billion float in 2010. Petrobras was the target of deepsea protests here last year.

- NZ Herald

Tamsyn Parker

Tamsyn Parker is the NZ Herald's Money Editor

Tamsyn Parker is the NZ Herald's Money Editor. A business journalist for ten years, she has worked in the UK and NZ for the New Zealand Herald, the National Business Review and a specialist publication on investment products for financial advisors. She is passionate about helping readers learn more about to make their money work for them.

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