KEY POINTS:
Poor old Telecom. The former "market gorilla" is now looking more like a small, shivering monkey vainly seeking shelter from chill winds in a corner of its zoo enclosure.
Its share price continues to hit all-time lows.
Having floated at $3 back in 1991 and hit an all-time
high of $9.63 in February 1999, it sank as low as $2.21 this week and has again been overtaken by Contact as the market's largest company.
At least the National Party has thrown it a banana.
Telecom looks likely to benefit from the Nats' $1.5 billion plan to develop faster broadband in this country if they win power.
The stock has always been the New Zealand favourite of large overseas investors and while it's clearly been sold down by many of them, the action isn't all one way.
This week Lazard Asset management increased its holding in the company by more than 1 per cent to 7.23 per cent.
A couple of days before that, Commonwealth Bank of Australia sold down from 6.93 to 5.93 per cent.
Telecom shares closed up 10c yesterday at $2.31.
ON THE WATERFRONT
Talk of a closer relationship between the ports of Otago and Lyttleton this week again comes shortly after the prospect of Chinese involvement in the New Zealand port sector.
Two years ago, one of the many divisions of Hong Kong billionaire Li Ka-Shing's Hutchison Whampoa looked to form a joint venture with Lyttelton Port Company but that deal was effectively sunk when Port of Otago bought a blocking stake in Lyttelton. A couple of weeks ago Chinese shipping giant Cosco's global chairman and chief executive Captain Wei Jiafu, who was in New Zealand, indicated his company was considering port investment opportunities here.
As it happens, Cosco and Li have quite strong links. Through various subsidiaries Li holds about a third of major Cosco subsidiary China Cosco Holdings.
That's not especially surprising given that Cosco is one of the world's biggest shipping lines and Li's Hutchison is one of the biggest port operators and both are based in the same part of the world.
Analysts have said for years that New Zealand has too many ports for its size and consolidation is inevitable.
While it took a step in that direction after Hutchison's tilt with the Lyttelton Otago tie-up, little further visible progress appears to have been made. Is this about to change?
Lyttelton Port Company shares closed up 3c at $2.25 yesterday while those in Port of Tauranga, the market's other listed port operator, were steady at $6.40.
MISERY INDEX
Hard on the heels of advertising agency MC Saatchi's findings that Kiwis are in denial over the current economic situation comes an update of the so-called "misery index".
The index can actually be calculated at any old time by simply adding a country's unemployment rate to its inflation rate.
You'll be pleased to hear that on this measure at least, New Zealand is ahead of Australia, meaning our index at 9 per cent is lower than Australia's 9.3 per cent. A year ago we were at 5.4 per cent while Australia was at 6.1 per cent.
In fact New Zealand has the lowest index among English-speaking countries. The country with the lowest figure? Switzerland with 5.3 per cent.
How does the US, where much of the current misery originated, fare?
It's at 11 per cent up from 7.5 per cent a year ago.
This is a pretty arbitrary measure and there's some talk at present about altering it to include asset price measures such as housing and equities.
MARKET MOVERS
A former colleague of Stock Takes once recounted how he was working for one of the financial newswires back in the 80s and having just reported some crucial tidbit of economic data watched in amazement as the New Zealand currency began to move quickly and substantially in exactly the opposite direction to what might have been expected.
Amazement turned into consternation when he realised it was moving in response to his own news report which contained a major error.
These things happen. In fact something similar happened on Wednesday when Bloomberg initially reported an ugly trade deficit as a surplus, "a super amazing surplus" according to one economist.
Safe to assume the error, which did produce "a small blip" in the currency before reality kicked in, caused a little more shouting than is usual in trading rooms around the country.
But as the economist Stock Takes spoke to said: "Given everything else that's going on, it wouldn't be here nor there."
EFTPOS SALE
It's no secret that eftpos company ProvencoCadmus, having reported a massive $36.3 million loss this year, is under pressure from its bankers.
Chairman Rick Christie told shareholders at the company's annual meeting this week its debt levels remained "uncomfortably high". However Christie said the company's bankers had now cut it some slack, agreeing to extend their loans until the end of February.
Meanwhile, the company formed by the merger of Provenco and Cadmus earlier this year still has the support of cornerstone shareholders Todd Capital and Peter Maire who have provided $8 million to help complete the merged group's restructuring.
Having decided against a capital raising due to market conditions, Provenco is now looking to sell assets. Plans to sell the Vantex distribution business were proceeding, he said.
Christie described the sale as a necessary sacrifice to "capitalise quickly on some investment opportunities in the payments business". PricewaterhouseCoopers is advising on the sale.
Christie said indicative bids have already been received from a number of parties for Vantex.
Stock Takes understands one of the bidders is US giant Ingram Micro, a Fortune 100 company which is the world's largest technology distributor.
Stock Takes is reliably informed Ingram is also sitting on a huge amount of cash.
ProvencoCadmus shares closed steady at 14c yesterday.
OUT OF CONTACT
Contact Energy admits it has had a surge in calls from consumers annoyed at price rises of up to 12 per cent and the directors' fee pool increases over the past week but it's not putting a number on those making the switch.
The company will hopefully have a more coherent message to customers than the garbled impression left with shareholders after its disastrous annual meeting last week.
The board unwisely gave up the opportunity to assuage growing sentiment against a near doubling of the available fee pool in the leadup and chairman Grant King turned down repeated invitations for some conciliatory gesture in response to offers from angry but polite shareholders.
Instead there was the usual rhetoric acknowledging the concerns and promising to discuss them at the next board meeting.
But with a PR disaster ballooning, a rushed decision that afternoon was made to hold base fees.
Contact's opponents may want to keep the Veuve Cliquot on ice until they see the figures for the 2009 year, though.
The hurried announcement said base fees would be held "at this time" and it's worth noting committee fees and shares made up around half, and in one case more than two-thirds, of total remuneration for non-executive directors in 2008.
- Grant Bradley
