Stock Takes: Investment envy

SkyTV has a hedging policy in place to protect it if the kiwi dives. Photo / Sarah Ivey

Stock Takes has discovered yet another reason to bear a grudge against the Aussies: they are better share investors than us.

A study conducted by Australian Securities Exchange (ASX) showed that about 7.3 million people, or 43 per cent of the adult Australian population, own shares, either directly through shares or other listed investments, or indirectly through the likes of managed funds.

This is an increase of 2 per cent from the last study conducted by ASX in 2008 and making Australia one of the leading share-owning nations in the world on a per capita basis.

Of course, Australia's universal superannuation scheme - introduced by the Labor government in 1992 - has had a hugely beneficial effect on the Australian investment scene. New Zealand's voluntary KiwiSaver scheme came much later in the piece - midway through 2007.

KIWISAVER HOPES

The NZX's head of communications, Rowan Macrae, said that despite the relative "newness" of the KiwiSaver regime, there were signs that retail participation in the local market had improved.

Australian investors had the benefit of a greater breadth of companies and sectors to invest in, which she said was why the opportunity to invest in state-owned enterprises, as proposed by the Government, would make a difference to New Zealand share ownership in the medium term.

"Anecdotally we know that more New Zealanders are developing an investment mindset due to KiwiSaver, as they will have a growing interest - literally - in the companies their KiwiSaver funds invest in," Macrae told Stock Takes. "But we expect it will take several years for this dynamic to flow through to growth in direct share ownership in New Zealand."

SKY HIGH

The New Zealand dollar has been heading northwards for the past couple of years, so it's no accident that Sky TV has also been performing strongly.

Sky TV's biggest expense is its programming and hardware costs, which are mostly settled in US dollars. The company has a hedging policy in place which is designed to protect it, should the kiwi fall out of bed. But these days the kiwi has been doing anything but. On Tuesday, the currency hit US82.60c, its highest point since floating in 1985.

Sky, through its hedging, may well be locked in to rates that are less beneficial than today's spot rate, but nevertheless the company does do well in times of currency strength. Forsyth Barr's head of research, Rob Mercer, said there's no doubt the stock has tracked the currency over the last two years.

"Their effective hedges are well under the current spot rate, but at the end of the day they are continuing to roll hedges out to protect the cost base of their business at the prevailing rates, so that locks in some quite good costs over the next two to three years," he told Stock Takes.

But Mercer said that although the stock had gained ground, its performance was well short of the re-rating that has occurred among its global peers. Sky TV closed yesterday at $5.73, not far off its 52-week peak of $5.90, and compared with its low for the period of $4.52.

BIRD SIGHTING

Andrew Bird, a co-founder of Australia's Aspect Huntley and a former chief executive of Morningstar, has taken a stake in Sharesight, a Wellington-based online portfolio management service. Bird, who led an investor group in taking a position in Sharesight, has also become an executive director of the company.

Sharesight said the appointment coincides with the company's move to promote its online share portfolio management system to Australian share market investors and their advisers.

Sharesight received a first round of external funding in 2009 from New Zealand venture capital firm Sparkbox and the New Zealand Venture Investment Fund. Aspect Huntley, an Australian investment information and research business, was acquired by Morningstar in 2006.