KEY POINTS:
Skating on somewhat thin ice considering the firm's clients, KPMG banking group partner Godfrey Boyce noted it was refreshing to see Bank of Scotland standing by troubled Geneva Finance and thereby aiding the firm's ultimately successful bid to secure a six-month moratorium from investors this week.
Others, notably
outspoken financial adviser Chris Lee, remain sceptical about BOS's commitment to the company, which owes it $43 million. Lee worries BOS may bail at the first opportunity when the moratorium ends, leaving debenture investors arguably worse off than had Geneva been placed in receivership.
But Geneva's trustee, Graham Miller, has indicated that he is effectively holding a gun to BOS's, or perhaps more correctly, Geneva's head. If a new arrangement - which preserves debenture holders' rights relative to the BOS's - can't be negotiated before the moratorium ends, he will place the company into receivership. Geneva chief executive Shaun Riley, who sounds as though he's trying to keep everybody calm and their fingers off triggers, said of BOS: "They were so supportive through this process and have behaved like a business partner should behave, and I cannot speak highly enough of them."
Not amused
Blue Chip's Mark Bryers is somewhat defensive at the moment, especially when it comes to the New Zealand business media.
There have been reports of investors unhappy with the property investment and management company. Complaints have included weathertightness issues at two North Shore apartment developments and alleged non-delivery of apartments for which investors have paid deposits.
The company posted a $2.6 million half-year loss earlier this year, from a $7 million profit a year ago. It has cut staff and is getting beaten up on property investment forums on the internet. All this is fuelling murmurings that all is not well at the company.
"Write something at your peril," were some of the first words out of Bryers' mouth when Stock Takes called him this week. "We've already taken two papers to the Press Council. We will win those and, to be frank, we're getting sick and tired of these pot shots. It seems to be duck season for us."
But Bryers reckons he'll get the last laugh. "All you guys are going to look like a bunch of fools in a couple of weeks when our accounts come out."
The ASX listed Blue Chip is standing by its full year guidance of earnings before interest and tax for the year to date of between A$23 million and A$25 million.
Bryers says the September quarter numbers will indicate the company is on track to achieve that.
"The directors for some three months now have reinforced the trading position for the company leading right through the December period. Under ASX rules if they see any change of 10 per cent or more they are required to disclose that.
"There has been no change in the directors' view of that result. For some reason that seems to have escaped all business media in New Zealand.
"People seem to think that we're linked to finance companies - Bridgecorp and the other stuff that's going on. We're totally bemused but not amused by it."
Ryman revalued
NZX-listed retirement home operator Ryman Healthcare has already said it expects underlying profit to jump 20 per cent this year. Investors will get some idea how that prediction is likely to play out when the firm releases its first-half results in two weeks' time.
The company has said it's maintaining its strong building rate of 300 retirement units and 100 care beds a year but it also flagged the impact of new International Financial Reporting Standards.
Hamilton, Hindin, Greene broker James Smalley says his firm's clients have been buying up the stock recently and he believes the anticipated IFRS effect is a factor.
The new accounting standards will see gains in the value of residents' homes recognised in the company's profit and loss statement for the first time.
Ryman posted a record net profit of $41.6 million for the previous March year but under IFRS, Smalley says that would have been about $55 million.
"From a share price perspective it might have the same effect as a share split.
"They shouldn't do anything but they always do. It's irrational but markets are made up of a lot of irrational people."
While the gains in the value of the firm's units were always recognised in its net tangible assets, IFRS will "highlight to the greater market how much embedded value they have in these villas. It will be interesting to see what the impact will be."
Ryman shares closed up 2c at $2.17 yesterday.
Unlucky leap
Canada Pension Plan Investment Board's revised offer for Auckland International Airport sent the company's stock skyward on Wednesday which is unfortunate for those offshore funds that track the MSCI global stock index.
As reported in the Business Herald yesterday, while the overall New Zealand weighting in the MSCI was reduced slightly, AIA's weighting within that rose.
Macquarie Equities estimates AIA's weighting within the MSCI's New Zealand allocation has gone from 9.94 per cent to 11.34 per cent and that represents an additional 8.8 million shares which will have to be bought by offshore funds who track the index to bring them into line.
While Macquarie's Arthur Lim says they won't have to buy immediately, they will certainly have to do so by the end of the month.
AIA shares rose 30c to $3.21 on Wednesday in reaction to the news of the new bid, but gave up 5c of that yesterday, closing at $3.16.
While the extra couple of million the world's MSCI-tracking funds will have to pay for the shares between them won't be a big deal for them, the buying should provide some additional price support for the stock.
Hook, line and sinker
The value of Fisher Funds' Barramundi Australian equity fund shares was scaled back yesterday after one of its biggest holdings Credit Corp on Wednesday issued an earnings downgrade which saw its stock plunge horribly.
Shares in the debt recovery outfit dived as much as 47.1 per cent, wiping nearly half, or A$217 million, from its market value, after it cut its 2008 net profit forecast by as much as 29 per cent due to higher employee costs and lower margins.
At 10 per cent of its total portfolio, Credit Corp is Barramundi's second largest investment.
Barramundi's shares closed 3c lower at $1 yesterday.
Magnum opus
Infrastructure developer and manager Opus has continued to make ground since its October IPO.
The stock, issued at $1.65, rose 20 per cent on debut late last month with rumours it was being scooped up by institutions and some high net worth investors.
Apparently Australian institutions have featured strongly in the buying and Commonwealth Bank of Australia is understood to be accumulating shares.
CBA accumulated big stakes in Auckland International Airport and SkyCity after they listed. Word is CBA and others have noted the success of Brisbane-based firm Cardno and are hoping for a similar performance from Opus. Both firms are engineering and consultancy management outfits looking to grow to take advantage of the infrastructure boom. Shares in Opus, which has been involved in projects such as Auckland's Britomart transport centre, closed at $2.07 yesterday.