Several institutional investors have expressed dislike for Fonterra's proposed share plan after seeing its presentation last week.

The professional investment community is scratching its head over what it perceives as a lack of independent governance.

As a co-operative, Fonterra is controlled by its farmer shareholders, who want the price of milk at the farm gate to go up.

But the proposed share plan is based on investors getting a benefit only from the value-added part of the farmer payout, which would likely go down if the milk price goes up.


The challenge for Fonterra is to keep its farmers happy while winning the support of the investment community. It's a hard ask to have two different masters.

"There's still major issues to be settled with the investment community," said one institutional investor. Any share offer is unlikely to be very successful without the support of the big boys around town.

Questions have also been raised about the timing of the offer, with some suggestions that it could go ahead around September - the same time as the planned partial float of Mighty River Power.

However Fonterra has been indicating it is more likely to go ahead with the share offer in November.


Shareholders in SkyCity Entertainment have barely blinked an eyelid over the controversy surrounding its plans to build a $350 million convention centre and increase pokie machines, all with the blessing of the National-led Government.

The company's share price, which was sitting around $3.26 at the end of November, has been steadily climbing in the past few months. This week it has traded around $3.86.

Goldman Sachs has predicted that an extra 350 to 500 gaming machines could bring in the equivalent of $28 million in after-tax profit - rising to $42 million when the centre is fully operational.


That will be music to the ears of shareholders. Shares in SkyCity closed up 3c on $3.89 yesterday.


Restaurant Brands will open its first Carl's Jr fast food outlets this year and the risque advertising used to promote the US burger chain overseas will soon be raising eyebrows in New Zealand.

The adverts, which invariably feature scantily clad young women whose physiques suggest they don't eat a lot of fast food, aim to grab the attention of the brand's target demographic - hungry young males.

And they probably do the trick.

The latest commercial for Carl's Jr's Southwest Patty Melt, featuring 19-year-old Swimsuit Illustrated model Kate Upton grasping a bulging burger while cavorting suggestively in the back seat of a convertible, is pretty full-on and if it screens on TV here it will definitely have to wait until after 8.30pm.

"Whether we use that ad or not, it [Carl's Jr's advertising in New Zealand] is going to be of a similar DNA and a similar look and feel," said Restaurant Brands chief executive Russel Creedy.

He said the company would use billboards and bus stop adverts initially and move to television once the new brand, which is expected to be immediately profitable, starts gaining some traction in the market.

Restaurant Brands shares closed up 2c at $1.93 last night.


Investors in smaller listed companies could soon be able to get their hands on some analytical research. Former Salvus Investments fund manager Simon Wilson and ex-McDouall Stuart analyst John Kidd have set up a local office for research firm Edison International Research. So far they have signed up New Zealand technology company Endace and also plan to cover some Australian small stocks for the Sydney office.

Wilson said he was arranging meetings to try signing up more New Zealand companies. "We have a number of target companies in mind."

Investors will need to bear in mind that the research is paid for by the company being covered. Wilson said it was upfront about the business model: "That is the only conflict and it's pretty transparent."

The research will not include any buy or sell recommendations, nor target share prices.

Companies being researched will have the chance to view the analysis before it goes public but would not have editorial rights to change it, Wilson said.


The Australian Securities Exchange this week announced a new A$1 million trial equity research scheme.

The scheme will target companies with a market capitalisation of less than A$1 billion and is designed to fund high-quality, independent research.

If the trial is successful the ASX has said it will assess how the scheme can be expanded. It estimates a fully operational scheme would cost up to A$10 million a year. The trial will also indicate how much the cost of the research will add to listing fees.

There have also been calls for more independent research in New Zealand.

In 2009 the Capital Markets Development Taskforce noted that a lower level of research coverage was leading to less investor interest in small cap stocks.

NZX yesterday said it has been talking to the industry on a range of measures to help improve research coverage for small companies but was not yet in a position to make any public announcements.