Contact sacks Alstom 

Hamilton: Contact Energy has sacked Alstom New Zealand, the company it employed to build a
multi-million-dollar power plant at Te Rapa.

The steam-driven co-generation plant was commissioned to supply the New Zealand Dairy Group's Te Rapa
factory and should have been finished in July.

NZDG says it will take legal action to recover costs from Contact. It has sent millions of litres of milk to its
rivals for processing and reopened its Morrinsville plant because of the delays.

But Alstom New Zealand managing director Geoff Hunt said Contact's action was "unjustified". The delays
occurred because a High Court injunction meant the plant had to give priority to supplying steam to the
factory, limiting Alstom's ability to conduct testing and modifications.

Wellington: International ratings agency Standard and Poor's has declined to comment on the budget policy
statement released on Wednesday, saying it had to do its own analysis before making public statements.

"We are reserving our comments as of now. We are paying very close attention to the BPS," said Chew
Ping, S&ampP associate director of sovereign ratings.

He said the agency would be processing the data contained in the preparatory fiscal document before it had
what he called "more definite things to say".

S&ampP has had New Zealand's AA-plus rating on creditwatch negative for about 18 months, while rival
agency Moody's downgraded New Zealand in 1998 to Aa2 from Aa1 with a stable outlook.

Finance Minister Michael Cullen told reporters at the release of the BPS that he found out on Tuesday
morning that an S&ampP statement was imminent.

"I don't know what Standard and Poor's are going to do. I know they're going to do it in the very near
future," Dr Cullen said.

Mr Chew declined to comment on the timing of any statement on New Zealand's ratings. He also declined
comment on the country's fiscal track, which was a key element of the BPS.

However, he said the BPS's economic forecasts had not altered the agency's view on the country's
underlying macro-economic state.

"Economically, we have said before that New Zealand is going through a cyclical upswing. So
macro-economically, we are favourable towards New Zealand's growth."

He said the current account deficit forecast included in the BPS, showing the deficit peaking at 8.5% of
GDP, was in line with S&ampP's expectation.

Dr Cullen said he was wary, however, of the potential influence of the current account on any eventual
rating action, telling Reuters Television in an interview he realised a downgrade was possible if S&ampP
was steered strongly by it.

Asked about the potential paradox of downgrading a country that was running fiscal surpluses and going
though a growth phase, Mr Chew said: "If - and this is a big if, and I'm not giving any indications as of now -
we do downgrade, of course, we will give our rationale, and you'll read it in our rationale why we do it. But
this is a big if." – Reuters

Petrol price outlook improves as crude stalls 

By Adrian Holland

Wellington: Just as local petrol companies raised prices for the fourth time this year, the world crude price
appears to have decisively halted its march north.

Oil producers have caved in to pressures from users that higher prices are threatening world growth. That
does not mean the cost of petrol will fall immediately but, notwithstanding ongoing volatility in the cost of
crude, it is a positive sign.

Just in case Opec is pulling an April fool's joke, the Clinton Administration is talking with some non-Opec
producers about what to do if Opec does not sufficiently raise output. 

The US has hitherto been able to sustain very high economic expansion without inflation. But inflation is once
again stalking financial markets, which are edgy ahead of expected anti-inflation interest rate rises.

In New Zealand, petrol prices rose again last week. Challenge joined rivals with a 3c hike. Fuel in main
centres is now about $1.03 per litre for 91 octane, $1.08 for premium and 67c for diesel.

Petrol prices have now increased 10 times in the past 12 months, around 25%.

Bob Constantine, head of new player Challenge Petroleum, said last week - the day before crude's slump -
more increases were inevitable. Indeed, he accused the big four oil companies of "jerking" the public around
with incremental price increases. Mr Constantine expected another 5c or 6c at the pumps.

It's worth noting that when Challenge launched in April 1998 it was amid a fanfare heralding new
competition. Briefly, its fuel prices were about 5c a litre below those of the majors. That was when petrol
was at a 10-year low, Challenge charging 81.5c for 91 octane, 86.5c for 96 octane and 45.5c for diesel.

Needless to say, the other companies responded immediately by cutting prices in surrounding areas to match
Challenge. A 1c change in the price of a litre of petrol impacts to the tune of about $30 million a year on the
cost of motoring nationwide.

Now that it is established in the market, it will be interesting to see if Challenge's "price following" tag also
applies to falling prices.

Anyhow, Fletcher Challenge Energy's marketing manager of oil products, Kevin Jones, was more sanguine
about the outlook.

He said the pump price of petrol had lagged the rising crude price as companies held off upping prices for
competitive reasons.

Higher petrol prices add to inflation, and while Reserve Bank Governor Don Brash is allowed to ignore
one-off factors such as a jump in world oil prices, it still increases pressure for a rise in interest rates and
such things as taxi, bus and air fares.

Like most people in New Zealand, Dr Brash will be hoping the power of the Opec cartel can be curtailed.

Trading 'Net site 

Wellington: Telecom, via its recent e-solutions partnership with EDS and Microsoft, has set up an online
trading site aimed at cutting its buying costs.

At this stage, it has eight suppliers and hopes to increase that number.

Telecom said such sites would allow businesses to cut the transaction costs on non-strategic expenses, such
as stationery and travel.

Payments could be made immediately, a plus particularly for small suppliers whose cash-flows could be
hampered by slow payers. Along with electronic invoicing, that should increase the speed of procurement.

Government change suits
                      manufacturer 

                                              Gilbert Ullrich is no friend of the
                                              Business Roundtable or former
                                              National cabinet ministers. In fact,
                                              one former minister told him the
                                              country would be better for his
                                              leaving.

                                              And leave the managing director of Ullrich
                                              Aluminium nearly did, planning to set up an
                                              Ullrich Aluminium subsidiary in Newcastle to
                                              take advantage of a large base of out-of-work
                                              skilled workers and attractive incentives to set
                                              up business in the Australian city.

                                              Although he points to the selling out or cutting
                                              back of three of his major New Zealand
competitors as the reason for expanding his Hamilton operations, there is no doubt Mr Ullrich feels more
comfortable with a Labour-Alliance Government in which Deputy Prime Minister Jim Anderton will have a
say in regional development.

"A change of government is better for manufacturers and exporters in New Zealand. It is more realistic."

Mr Ullrich will spend $10 million expanding Ullrich's extrusion operations at the Te Rapa industrial estate, in
Hamilton. Up to 50 jobs will be created over the next six months and the aluminium plant will double in size.
Another $5 million will go into boosting distribution warehouses from 14 to 16.

In Dunedin to host a function and catch up with staff, Mr Ullrich proudly outlined the success of his local
operation, for which he has a soft spot.

Born in Christchurch, a young Mr Ullrich was a frequent visitor to Dunedin to see relatives. He recalls
catching freshwater crayfish in Kaikorai Valley stream across the road from where his factory stands. Staff
members, obviously aware of the fishy tale, ducked across the road at lunchtime and presented Mr Ullrich
with some freshwater crayfish which he had with sandwiches.

In Dunedin, business was good, he said. The company was having to use storage near the docks because
Dunedin was the main distributer for marine aluminium supplies to South Island boat builders.

Also made in the city are stepladders and security grills and a thriving foundry casts thousands of parts and
components which are shipped to boat builders around New Zealand and Australia. Anodes for crayfish pots
to stop the pots from disintegrating are also cast in Dunedin.

Ullrich Aluminium was joining the Dunedin engineering cluster and was determined to expand its local
operations, he said.

The costs in Dunedin were moderate, there was a skilled base of workers in the city and the aluminium
industry was on the rise.

"I think it is an industry that should be encouraged. It is environmentally friendly, it creates skills and
employment and there is no reason why we can't be the frontrunner in that industry."

Asked about the new capital markets index which was launched on Friday, Mr Ullrich said he had some
reservations.

Sooner or later, New Zealand companies were sold offshore when the dollar slipped in value, making it
attractive to buy New Zealand enterprises.

"If we were a public company, we would be a prime target with a $100 million turnover and 500 staff. We
would be taken over and moved offshore. I am not happy with that idea. We have good people in this
country and they deserve better.

"When they sell a company off, they always try to make a bigger return by hiking up the local charges. I am
sorry when that happens."

The Ullrich group has just completed negotiations with the Engineering Printing and Manufacturing Union on
a two-year collective employment contract with its staff - ahead of the Government's Workplace Relations
Bill which is likely to require employers to move back towards a greater use of collective contracts.

A former Engineers Union member, Mr Ullrich said negotiations were an "honest exchange" which ended in
general agreement.

"We are not afraid of the new legislation. Because we are a good employer, we haven't laid off anyone in 30
years of operation. Workers in the company realise we have to be competitive."

$140m returned 

Wellington: Government coffers are in for a $140 million boost from two State-owned power companies.

Meridian Energy and Genesis on Thursday posted maiden half-year profits totalling $66.3 million and
together will pay $139.43 million in tax and dividends.

Meridian also unveiled plans to spend money, saying it was keen to buy the 75% stake in Transalta that
Natural Gas Corporation has bid for. Competition watchdog the Commerce Commission will next week rule
on NGC's bid to buy the stake in the country's largest power retailer from Transalta Canada.

Meridian, the largest state-owned generator, last week posted a $50.7 million profit in the six months to
December 31. During the half-year, it paid the Crown $99.9 million in dividends and set aside $25.72 million
in income tax.

The profit was $1.8 million ahead of budget and was a 6.4% return on shareholders' funds, compared with a
5.29% target.

Genesis posted a $15.6 million profit for the same period. It set aside $9.41 million for tax and declared a
$4.4 million dividend to be paid next week.

Meridian and Genesis were formed on April 1, 1999, when Electricity Corp of New Zealand was split up. A
third generator created in the split, Mighty River, has yet to post its result. – NZPA

Force to be reckoned with in sale of Auckland
                                   centre 

Wellington: Force Corp, in the process of merging with Internet company Ihug, on
Friday reported it was having problems selling its Force Entertainment Centre in
Auckland.

Force said settlement on the sale of the centre had been delayed as a result of a dispute with Trust Company
of Australia Ltd, which is buying the centre.

"The buyer contends that practical completion of the shell of the centre was not achieved by December 30,"
said Force, which added it was issued with a Certificate of Practical Completion on that date "and
accordingly are demanding the buyer comply with the terms of the share purchase and loan deed".

Force said the centre was now fully leased and had an annual rent of about $6.8 million.

It is divesting its property assets, including the centre, as part of the merger with Ihug.

The merger is conditional on shareholders approving the deal and is due to take effect from April 1.

The new group will take the name of fast-growing Internet services provider Ihug, which has more than
100,000 active subscribers in New Zealand and Australia.

Force chairman Peter Francis said last month that his company was unlikely to make any profit out of the
sale of the centre because of delays and cost overruns on the project.

Force shares were unchanged at 69c at the close of trading on Friday.

Wellington: Financial information, news items and data for this week are:

TODAY 

New Zealand Stock Exchange's new capital market opens.

Food price index, February 2000 - 10.45am.

TOMORROW 

ANZ commodity price index, February 2000 - 1am.

WEDNESDAY 

RBNZ monetary policy statement - 9am.

RBNZ official cash rate review - 9am.

Registered unemployment, December 1999 - 10.45am.

THURSDAY 

Local authority statistics, December 1999 quarter - 3pm.

CDL Investments/CDL Hotels/Kingsgate International full-year results.

FRIDAY 

National Mail NZ public offer closes.

REINZ house sales, February 2000 - 3pm.

Time of the essence in profiting from funds 

It is an old but true cliche that "time in the market, not timing" is important. This is illustrated well by the
performance of Rothschilds Australian Share Fund. The fund has just passed 25 years in existence since
being launched in December 1974. According to an article in Rothschilds' client magazine, Concordia, there
were very few funds to choose from when the fund was launched. Today, between Australia and New
Zealand, we have around 3000 to choose from, apart from direct investment.

The performance of the fund has been remarkable in that it has achieved an average of 17.9% every one of
the past 25 years (NZ dollar return). Considering the ups and downs over that period, it is very satisfactory.
As we all know, events in October 1987 knocked about 30% off the value of most managed funds at that
time. The nature of the Australian market has changed dramatically as well. In 1974, the top 10 companies in
Australia were dominated by mining companies. The top seven were all in resources - such as BHP, CRA,
MIM, Hamersley, WMC. Today, the top 10 are dominated by media (News Corp), communications (Telstra
and Optus) and the major banks. Only BHP and Rio Tinto (CRA) make the top 10 now and they have a
much different company structure to that of 1974.

Rothschilds has been criticised for being conservative. It admits it was somewhat defensive during the 1990s
but the overall results speak for themselves. On the overall return, if you had invested $A10,000
($NZ12,500) in 1974 you would have $A509,755 ($NZ637,000) now, assuming all distributions were
reinvested. It is not a large fund, at $292 million, compared to others but has managed to outperform the
Australian market each year by an average of 4.4%.

The Rothschilds Australian share fund is a very good example of how long-term investment in equities can
provide sustainable growth. The many ups and downs are evened out over time and the professional
management takes advantage of buying opportunities and market trends. Many direct investors would have
benefited just as well over the time by holding shares such as BHP, purchased at $A2, or Westpac, at
$A2.80, in 1974.

However, the spread of risk throughout this time with a diversified portfolio of both other investments and an
exposure to the Australian market of at least 30 companies in the Rothschilds fund has meant that smaller
investors have not suffered the same large swings as the direct market.

At present, with many Australian shares over $10 for one share, a small investor can still benefit for the next
25 years by investing in the Rothschilds Australian share fund from as little as $10,000 to cover the whole
market.

  Peter Smith is a certified financial planner with Downie Stewart solicitors, Dunedin.

Newmarket lifts profit 

Wellington: Property company Newmarket reported that its half-year profit to December 31 had risen to
$2.9 million from $2.6 million in the same period a year ago.

It declared a 3.8c per unit interim dividend to be paid on March 24.

11 April 2000

Clear not paying i4free's legal
                                  bills 

Auckland: Fledgling free Internet company i4free has rejected Telecom claims that Clear
Communications is underwriting its High Court action against Telecom's attempts to
block its service.

"We are paying our own legal bills, which we envisage will be a huge part of our costs," i4free's chief
executive Annette Presley said. 

"It will probably cost us in the order of $1 million in legal fees to take this issue to completion, and that money
was earmarked for the further growth and development of our business."

But while Ms Presley said that i4free was funding the $20,000 a day it was costing to run the case and pay
QC Jim Farmer to represent it, she said Clear had provided the High Court with an indemnity against any
Telecom counterclaim for damages should i4free be unable to meet them from its own resources.

On Friday, the High Court granted i4free an interim injunction barring Telecom from discriminating against
i4free or any single Internet service provider if the Auckland Airedale St exchange became overloaded.

Ms Presley said i4free was expecting to create 100 new jobs in the coming year but that growth rate could
well be in jeopardy.

The company had 8000 customers when its row with Telecom blew up. A further 3000 could have
registered since.

With Telecom's restriction on i4free's access removed, connections to its service had quadrupled and the
company had received about 3000 e-mails in support, Ms Presley said.

Telecom spokesman Glen Sowry reiterated the claim that Clear, and effectively its owner, British Telecom,
were working in an alliance with i4free.

Clear has made no secret that it is sharing interconnection revenue with i4free that Telecom pays to
terminate calls to i4free on the Clear network.

Mr Sowry said that, and the fact Clear was prepared to stand behind i4free to the tune of $500,000 in the
event of a successful damages claim, was proof.

He also said Clear had rejected an effort by the Government to broker a standstill arrangement which would
have ended the 2c a minute charge imposed by Telecom on Internet calls outside its 0867 access regime. 

The offer also preserved Clear's rights to interconnection revenue from Telecom until the end of this year
when its interconnection agreement expires.

Anderton hears i4free's case 

Wellington: Long-time Telecom critic Deputy Prime Minister Jim Anderton was lending
small Internet company i4free an ear yesterday, as it prepared to battle Telecom in the
courts today over Internet access.

Mr Anderton met i4free chief executive Annette Presley to "listen to the issues" on its dispute with Telecom
over the 0867 Internet access code.

Neither Mr Anderton nor Telecommunications Minister Paul Swain would comment on the issues before the
court and on Telecom's behaviour.

Mr Anderton said: "I'm not commenting on anything to do with the current case before the court. We've got
an inquiry going at the moment which we don't want to prejudge."

Before the meeting, Mrs Presley said i4free wanted the Government to set up a regulator "with guts and
power", as there was in Australia, to rule in such disputes, and "find some way to control Telecom".

However, there seemed little chance of that.

"I believe that we'll be in court for the next year and we have earmarked $1 million for this litigation case
that we should be using to hire people."

I4free now had 12,000 customers, 4000 of them from Xtra, Telecom's Internet service provider.

Internet users are looking for more action from the Government over the 0867 Internet dial-up code fight.
The Government has already branded 0867 "anti-competitive" but has taken no action, preferring the Fletcher
telecommunications inquiry to recommend a solution.

The Telecommunications Users Association called yesterday for the Government to "bang heads together"
and find an interim solution until a long-term solution could be delivered by the inquiry at the end of
September.

Certificates for contractors 

                                     By Neal Wallace 

                                     Young people seem turned off forestry careers by the
                                     physical nature of the work, despite there being plenty of
                                     jobs, a Taieri contractor says.

                                     Greg Gray, a silviculture contractor, yesterday said there
                                     were plenty of job opportunities in forestry and with
                                     predictions the Otago and Southland tree harvest would
                                     double to 2 million cu m a year by 2005, there would be
                                     even more jobs.

                                     Mosgiel logging contractor Tony Gamble agreed, saying he
                                     struggled to get young people keen to work in forestry but
                                     hoped national industry training certificates would help
                                     make it more appealing.

                                     Yesterday, Mr Gray and Scott Wilkinson were presented
                                     with National Certificates in Silviculture and Mr Gamble a
                                     National Certificate in Harvesting.

                                     "People always look at qualifications to back up what they
                                     are doing," Mr Gamble said.

                                     Earlier this year, the Otago Polytechnic struggled to get
                                     enough students for its forestry courses.

                                     At yesterday's certificate presentation, City Forests
                                     general manager Phil Taylor said forestry was a tough,
                                     physically demanding job but increasingly it required trained
and skilled staff.

It can also be rewarding with City Forests paying staff a bonus for having industry training certificates to
recognise the effort they put in to improve their skills.

In return, forestry companies had contractors with skills which helped maintain health and safety standards
and improved efficiency, he said.

"There is a social as well as an economic benefit."

Phil Williams, the regional training adviser with Forest Industries Training, said the certificate was equivalent
to two years full-time tertiary study. Doing it part-time took contractors up to five years to complete.

Nationally, there are 5500 forestry sector trainees and 1500 in processing, about 60% of the work force. In
Otago and Southland there are 16 starting training from the forestry sector and six from processing.

Tariff cuts on hold at least until 2005 

By Dene Mackenzie

Tariffs would be frozen at present levels until at least July 1 2005, acting
Commerce Minister Trevor Mallard announced yesterday. 

The July reductions planned by the previous National government would
not go ahead and the Government would move urgently to repeal the
Tariff Amendment Act 1998, which was implemented to phase out all
tariffs by July 1 2006.

"The coalition government has made it clear that New Zealand will no
longer be removing tariffs on a strictly unilateral basis. We do not see
any point in New Zealand leading the world in this way. We will consider
tariff changes where there are clear benefits to New Zealand," he said in
a statement.

The programme of tariff removal for beer and paper, paper products and
printed material, which was agreed as part of the Gatt Uruguay round of
trade negotiations, would continue.

"In this case, our major trading partners have also agreed to removal on
the same time scale and we are already benefiting from that
programme."

The Government was continuing negotiations with Singapore on a possible closer economic partnership and
would undertake an extensive process of consultation, he said.

Former visitors off to shipbreakers 

By Doug Wright

Included in the recent steady procession to Indian shipbreakers are another three smaller overseas visitors to
this harbour in the 1970s. After varied careers these vessels end their days under the names IPS Chennai,
MSC Sandra and Novazs. 

In earlier days, they called at Dunedin on charter to the Hamburg-Sud group as Columbus Coromandel,
Columbus Tahiti and Cap Breton, respectively.

The latter vessel was built by the Orenstein-Koppel yard at Lubeck for Rolf-Dieter Nissen K.G. Launched
as Sonnholm on March 12, 1970, the 2832gt, Flendsburg-registered motor ship went on trials in June 1970.

Renamed Cap Breton before completion, it visited Dunedin in August and December, 1970, while employed
on the east coast North American service. The ship retained this name until 1984 then traded as Diamond
Princess, November Star, Su Sheng and finally as Novazs. 

Likewise, the 8475gt Columbus Coromandel had only been in service for two months when it visited Port
Chalmers in December, 1975. It made two further calls in February and May, 1976.

Also built by Orenstein and Koppel, it was launched as Senta on May 23, 1975, for the Cosima Poseidon
group of Hamburg. Delivered five months later as Columbus Coromandel, it traded as such for the next
five years.

Then after reverting to the name Senta, it become Monte Pascoal, when Hamburg-Sud chartered it in 1981
for its South American service. Later that year it became Muscat Bay, on charter to OCL for its
Australia-Middle East service.

New owners renamed the ship Marina Star in 1985, then from 1986 to 1991 it served as Sea Express.
Since then it carried the names Asia Express, Tiger Speed, then IPS Chennai from last year.

The 5478gt Columbus Tahiti made three calls here in 1977 and 1978. Ordered by Reith and Company of
Hamburg, it was launched by Schiffb. Unterweser, Bremerhaven, on July 10, 1968, and completed on
October 24, 1968 as Meta Reith. 

Renamed Columbus Tahiti in 1977, the ship subsequently was renamed Willie II then Barbara Leonhardt ,
both in 1979. Seven years later it came under the control of the Mediterranean Shipping Company as
Sandra S. It was then destined to end its days, from 1994, as its MSC Sandra. 

Oldest vessels in the Columbus Line container ship fleet today date from 1979. They are Columbus
Queensland (not seen here since February, 1998), Columbus Canada and Columbus Victoria. The latter
pair entered service as Columbus Canterbury and Columbus Lousiana respectively.

They have recently been sold to Israeli interests for chartering back to their former owners. This will also
see the trio transferred from the Liberian to Cypriot flag. All three spent most of their lives registered at
Hamburg.

Camerlin Group quietly lifts its stake in Brierley
                                to 24.4% 

Wellington: Brierley Invest-ments' main shareholder, Camerlin Group, has been quietly
lifting its stake over the last month through a subsidiary in the British Virgin Islands.

Malaysia-based Camerlin now owns 24.4% of BIL, after buying about 59 million shares.

Camerlin's topped up its stake last week - 25 million shares at 42c - taking its holding from 642.7 to 667.7
million shares.

Its foray follows the move by BIL to incorporate in Bermuda and base itself in Singapore.

Camerlin is a consortium under the loose control of Malaysian tycoon Quek Leng Chan and his Hong Leong
Group. Other investors in Camerlin include Indonesia's Salim Group, Singapore-listed company Haw Par
Corp and Singapore's Sembawang Corp.

This is the first time Camerlin has bought shares in the company since acquiring a 20% shareholding in 1996,
when it paid 140c a share for 603 million shares. At Friday's close of 42c, Camerlin had a paper loss of
nearly $600 million.

Brokers doubted the move by Camerlin was part of a big push on the shares. Most break-up valuations for
BIL were around what its shares were currently trading at.

It was more likely that Camerlin was trying to cement its control.

One analyst noted that Camerlin might be trying to prop up the share price.

BIL's share price spiked up to 75c in New Zealand dollar terms ($S64c) when it listed on the Singapore
exchange on March 31.

Apart from wanting BIL to make a strong showing in its new home market in Singapore, Camerlin is
understood to have a top-up arrangement with Nomura if BIL falls below 47c.

The agreement with the Japanese investment house was to help finance Camerlin's original purchase of
shares. The loan was for $US105 million ($211 million).

Camerlin's buying also comes as Franklin Resources disclosed it now holds less than 5% of BIL. The US
fund manager had held about 12% of the company.

Eventures float 

Wellington: Hitherto privately-owned Internet investor Eventures is to publicly float up to $30 million worth of
stock.

The company, which provides investment, facilities and management assistance for new Internet enterprises
as well as being involved in e-commerce, is 40% owned by Japanese Internet star Softbank Corporation.
Rupert Murdoch's News Corp also owns 40%, through Epartners. The local connection is Craig Heatley,
who got pay TV company Sky Network Television under way and holds a significant stake in Independent
Newspapers Ltd. The Heatley family owns the remaining 20%.

The offer of 50 million shares at 60c each will open in a fortnight.

J. B. Were will run the float.

Wellington: The sharemarket finished firmer yesterday, with Telecom and Sky TV strong among the leaders,
but a cautious tone prevailed as people wait to see whether American markets will have another unstable
week.

"There's some caution out there after the movements in the US," Craig and Co's Matt Willis said.

"While the industrial sector of the American market looks to be consolidating above 11,000, I still think there
is a very real sense of nervousness about the potential volatility of the tech-rich Nasdaq," Mr Willis said.

Yesterday, the NZSE40 capital index was up 15.66 points at 2154.27, while smaller stocks gained 9.75 points
to 5382.47.

Falls outnumbered rises 66 to 55 among the 155 stocks traded.

Turnover was worth a massive $452.15 million but $297 million of that was due to the sale of 60% of Waste
Management by parent Waste Management Inc in a secondary listing.

Market driver Telecom saw trade worth $82.56 million and Fletcher Paper accounted for $39.90 million.

Waste Management's new ordinaries closed at 335, up from an issue price of 330, while the existing ones
were down 10c at 360.

Telecom was up 25c at 980. Mr Willis said the market was becoming increasingly aware of the value of its
alliance with Microsoft and EDS.

The Fletcher Challenge stocks gave up ground as people locked in profits following recent gains as the
company moves to split up the letter structure.

Building fell 5c to 225, Energy dropped 15c to 510 and Fletcher Paper, discounted from its 250 sale price to
Norske Skog, was down 1c to 229.

Forests eased 1c to 76, where it appears to have levelled off.

"There's talk of a deal being done there - how imminent that is, or whether it may occur, is hard to say," Mr
Willis said.

Natural Gas Holdings also saw strong trade but ended down 2c to 129, while the rights added 1.5c at 11.5.
Its profile has risen since getting clearance from the Commerce Commission to go ahead with its purchase
of electricity company Transalta.

"It's an extremely good price at these levels and the price has been depressed probably more than anything
by the rights issue," Mr Willis said.

Baycorp was up 9c at 1034 after Deutsche Australia declared a 15.64% interest on Friday.

Air New Zealand domestic A shares eased 2c to 206 and the foreign Bs dropped 8c to 255. Chief executive
Jim McCrea said Qantas taking a stake was not in Air New Zealand's long-term interest because it would
mean giving up the long-sought-after Ansett Australia.

Qantas was reported as wanting more than 40% of Air New Zealand.

Meanwhile, Singapore Airlines, Brierley Investment's preferred bidder for its 17% stake held though the B
shares, joined the Star Alliance grouping of airlines, of which Air New Zealand is also a member.

Brierley Investments, after its main shareholder, Camerlin Group, reported lifting its stake over the last month
to 24.4%, was steady on 42.

Among the local tech stocks, Strathmore was down 1c to 35 after announcing it had bought 16.7% of Soch
Tech America, a business-to-business e-commerce software company operating in the construction industry.

Advantage Group rose 21c to 510, Eforce firmed 1c to 37, Ephone gained 1c to 54, IT Capital was up 4c at
55, Newcall eased 1c to 50 and Tag Pacific jumped 10c to 75.

Elsewhere, AMP dropped 19c to 1861, Auckland Airport shed 1c to 236, Carter Holt fell 1c to 193, Ceramco
added 7c to 162, Contact lost 5c to 259, Guinness Peat dropped 4c to 133, Independent News Ltd added 3c
to 412 and Lion Nathan fell 5c to 352.

Sky City closed up 5c at 620, Sky TV jumped 20c to 480 and the Warehouse gained 20c to 450

at 3-year high: survey
By Dene Mackenzie

Business confidence among members of the Otago Chamber of Commerce and Industry is at a three-year
high, according to chief executive John Christie.

A business survey of chamber members released to the Otago Daily Times yesterday showed more than
55% of the 218 respondents had seen an increase in the total value of their business in the three months
ended March 31 compared with the same period last year. Nearly 13% had noted a decrease and 31.65%
remained the same.

However, when asked about their expectations of business value in the next three months, only 10%
expected a decrease.

Mr Christie said the survey showed the best results since the chamber started surveying its members three
years ago and the results were backed up with solid figures.

"Members are seeing better bottom-lines and more profitability coming back. They are getting a better return
on their investment.

"All sectors were productive, which is good news for Dunedin."

Job growth - traditionally the last confidence indicator to show an improvement - had also proved positive in
the recent survey, he said.

More than 74% of respondents expected their full-time employee levels to remain constant in the next three
months but 21% were expecting an increase. Nearly 66% of respondents expected their part-time
employees to remain the same and 12% expected an increase.

Employee groups represented in the survey were: one to 10 employees, 70%; 11 to 24, 15%; 25 to 50, 8%;
50 and above, 7%.

Nearly half of all respondents expected their company's production to rise during the next three months.

"Although the survey is just a snapshot, this snapshot shows things are far better than the same survey three
years ago.

"There is always someone going to the wall and that has an effect on our economy, the employees,
management and shareholders. But in the bigger picture it shows Otago right up there. Profits are back. It is
time to hold our heads up and say things aren't that bad here now."

In brief 

  AIF bids for rest of Infratil

Brisbane: The Australian Infrastructure Fund announced yesterday it was making an offer for all the
shares in Infratil Australia it did not already own.

AIF is offering two AIF stapled securities for every five Infratil shares.

The offer, based on Friday's AIF closing price of $A2.16 ($NZ2.62), represents a 35% premium to the
three-month weighted price of Infratil before March 9.

Principal conditions are that AIF becomes entitled to not less than 90% of Infratil's shares and that the
management agreement of Infratil's current manager, HRL Morrison & Co (Australia) Pty Ltd, is
terminated. - AAP

  Internet unit `world first'

Wellington: Steel and Tube Holdings believes it will set a world first for the steel products industry with its
planned launch of an Internet trading unit.

Steelwarehouse.co.nz will begin trading on May 1, initially as a separate business in Auckland. A warehouse
in Christchurch and later one in Vancouver, British Columbia, would follow, the company said yesterday.

"It is believed that the trading concept that this business will operate under is a world first for the industry,"
said Steel and Tube's chief executive officer, Nick Calavrias, in the announcement. - NZPA

  Soft Tech shares for Strathmore

Wellington: Strathmore Group said yesterday it would invest $2 million in a 16.7% interest in Soft Tech
America Inc, a business-to-business e-commerce software company operating in the construction industry.

Strathmore will acquire its interest through the issue of new shares in Soft Tech, which was founded in New
Zealand in 1987.

It also has an option to buy a further 16.66% of Soft Tech for $3 million.

Soft Tech has offices in the United States, Europe, Australia, and New Zealand. It provides costing and
estimation modelling software for commercial aluminium, timber and plastic joinery products throughout the
world. - NZPA

  Deutsche interest in Baycorp

Wellington: Deutsche Australia, part of Germany-based Deutsche Bank, has disclosed it holds 15.64% of
Auckland-based debt collector and company information group Baycorp.

In a substantial security notice to the Stock Exchange, Deutsche said it held the shares on behalf of other
shareholders.

Baycorp's shares closed last night up 9c at $10.34. - NZPA

  Lend Lease sells to NAB

Wellington: Lend Lease Corp said yesterday it had sold its funds management, life insurance and non-real
estate investment management businesses to National Australia Bank for $A4.56 billion ($NZ5.54 billion)
cash.

BP into Castrol 

Wellington: BP Oil New Zealand has applied for monopolies clearance to acquire Burmah Castrol NZ.

Geoff Thorn, manager responsible for Commerce Act matters at the Commerce Commission, said in a
statement this week that the deal was part of the international acquisition by BP Amoco of Burmah Castrol.
The British-based parent companies have world-wide operations. 

Legislation prohibits combinations that result in dominance being acquired or strengthened.

'Net squeezes sharebrokers 

Wellington: Traditional sharebrokers were being forced out of existence by cheaper,
more convenient Internet alternatives, an e-business seminar was told in Wellington this
week.

"The stockbroker as we know it won't be here in five years," KPMG's e-business consulting practice head,
Phil Royal, said. "The front door Mum and Pop stockbroker is being forced to change very rapidly.

"If you could do a stock trade for $9.95, then why would you go and pay something like $200 or $300?"

Sharebroking was just one group having to rethink its business approach as the Internet changed customer
perceptions and expectations, Mr Royal said.

"It's about a whole business transformation," he said. "For New Zealand trade, e-commerce is likely to
produce the largest opportunities in 100 years, but it could also wipe out some of our export businesses in the
next five years if we don't understand and grasp the opportunities."

New Zealand was two or three years behind the United States in embracing e-commerce. More than half of
all New Zealanders and 98% of businesses had access to the Internet.

In New Zealand, customer security was perceived as the No 1 barrier to electronic commerce. It was much
less of an issue in the United States and Europe, Mr Royal said.

"How many people now worry about ATM security much?"

Easing evident in retail sales 

Wellington: Real retail sales were stronger than expected in the March quarter but the
underlying trend was showing an easing from the previous two quarters, Statistics New
Zealand said yesterday. 

The data published yesterday morning showed actual sales up 7.2% in the three months to March compared
with a year earlier, but after adjustment for seasonal factors they were unchanged on February's level.

Actual retail sales were 0.2% higher in the March quarter compared with the December quarter, against an
average market expectation of a 0.4% rise.

Bank of New Zealand chief economist Tony Alexander told Reuters: "It [the growth] is weaker than we
thought but it is consistent with anecdotal evidence that consumers have been shutting up their wallets since
New Year's Eve.

"But it comes with a string of weaker data, the labour market is weaker in the quarter, business data weaker
and consumer spending weaker. It's an extra number added to the Reserve Bank only moving a quarter of a
basis point next week.

"It's a sign of things weakening and suggests that maybe things have eased off more than they expected. It's
a sign that maybe a little steps approach [to monetary tightening] is in order."

On a seasonally adjusted basis, sales for the March quarter increased 1% on the preceding three months to
$10.64 billion, but after adjustment for inflation were flat in value although up 0.2% in volume, Statistics NZ
said.

With motor vehicles sales removed, the seasonally adjusted sales were unchanged.

"The easing in the quarter is not unexpected given the variable monthly results," said Government Statistician
Len Cook in a statement.

The result had been influenced by factors such as higher levels of household debt, a slowdown in building
activity and higher mortgage interest rates, Mr Cook added.

"Offsetting these influences are reported high levels of consumer confidence, increasing full-time
employment and higher export commodity prices."

Stock levels, which had been high in the December quarter in anticipation of Y2K problems, did not appear
to show any notable decrease in the latest period. 

Total stocks held by retailers in the quarter stood at $3.78 billion, up 6.2% on a year earlier and only $33
million less than in December.

Motor vehicle retailing contributed strongly to the latest sales results and with inflationary effects removed
suggest real volumes increased.

Higher petrol prices dominated the quarter's sales for motor vehicle services and were entirely responsible
for a 1.8% increase in the value of seasonally-adjusted sales in this category, Mr Cook said.

Dollar at lowest since 1986 

Wellington: The New Zealand dollar plunged more than three quarters of a US cent to
hit nearly a 14-year low yesterday, as hedge funds played the market and the Australian
dollar weakened.

The kiwi finished at US47.97c from US48.83c on Monday and US48.27c at the open yesterday. 

Its Australian counterpart continued to suffer worries regarding the spread between Australian and
American interest rates, compounded by recent negative retail sales figures.

The aussie finished here at US58.04c, sharply below yesterday's US58.87c.

"This morning, we saw quite large selling interest from some of the hedge funds," Citibank senior dealer
Dean Sheridan said.

They were taking advantage of the absence of exporter buying to push the kiwi down, hoping to re-enter at a
lower level later.

That saw the local dollar fall to US47.85c at one stage, a level not seen since September 1986.

Another dealer said one factor yesterday was also bond selling from offshore overnight, injecting extra New
Zealand currency into the market.

Trade was heavy in the morning but slack in the afternoon.

Mr Sheridan said the kiwi should hold over the next 24 hours, but could drift down as far as US47.50c if the
aussie went lower.

A surplus of safes at hotel 

                                By Dene Mackenzie

                                Southern Cross Hotel general manager Ken Moffett has a
                                security problem. He almost has too much of it.

                                State Insurance will this month move out of what was a
                                purpose-built head office on the corner of Rattray and Princes
                                Sts to the former Penrose Building on the corner of St Andrew
                                and George Sts.

                                When State moves, the Southern Cross Hotel will start work on
                                its $2.5 million project, building 38 new rooms on three floors it
                                does not already occupy.

                                The basement, which contains 12 walk-in safes, also becomes
                                available for the use of the Southern Cross. The safes were
                                designed for the insurance company when the State office was
                                opened in November, 1958. At one stage, the insurance records
                                of State customers throughout New Zealand were housed in the
                                safes.

                                But, things have changed. Although State still uses some of them,
                                others contain hotel crockery, cleaning gear and glasses.

                                Dunedin Casino has asked to hire two of the safes but Mr
                                Moffett was not sure yesterday what the others would be used
for.

Diversity pays 

Wellington: Returns from diversified investment portfolios held up well during April
considering the carnage that struck specific market sectors, says Spicers Portfolio
Management.

In its latest personal investor index report published yesterday, the fund manager said returns for a diversified
portfolio shrank by 1% over the month but were showing a 12.2% annual gain since the inception of the
index in June 1985.

"The events of early April came as no surprise as the high valuation of `anything.com' companies succumbed
to gravity when US employment costs rose and the spectre of rising interest rates to control inflation soaked
through." 

But share prices of attractively valued companies recovered some ground towards month-end as the bargain
hunters rejoined the markets.

Local commercial property returned 0.3% in April and 6.9% for the year, and local bonds 0.4% and 1.2%
for the same periods while local shares fell 1.8% and 5.2% respectively.

Offshore shares fell a heavy 4.2% in US dollar terms but a weaker kiwi reduced the loss to 2.4% and they
were left showing a "hearty gain" of 29.7% for the year. Offshore bond values fell 1.4% in April but were
11.2% higher for the year.

The Spicers index measures investors' pre-tax returns as if they had invested equally across five investment
markets - New Zealand and offshore shares, New Zealand and offshore bonds and New Zealand
commercial property.

Local Government NZ asks for
                                 input 

The future of economic development in New Zealand is receiving priority treatment
from the Government and there is a move in Otago to have a unified approach. Business
Editor DENE MACKENZIE reviews a submission to the Government by Local
Government New Zealand.

Developing a national, regional and local economic development agency, making
information affordable, promoting import substitution and increasing migration to
regional areas are part of a wide strategy Local Government New Zealand (LGNZ)
hopes will stimulate economic growth.

In a briefing paper to Economic Development Minister Jim Anderton, LGNZ said it
wanted local government represented on the board of Industry New Zealand being set
up by Mr Anderton to push regional development.

"A local government contribution at that level would provide both added value to the
work of the new organisation and represent a strong symbol of the new partnership in
this area between local and central government."

Economic development has been adopted by many local authorities as the key to
stopping a drift away from their particular area by its young people and those seeking
promotion in their jobs.

More than two-thirds of local authorities have some form of local economic
development function. All city councils are involved in local economic development with
the five most common areas of involvement being business development, tourism,
marketing and promotion, business advice and inward investment.

This involvement has been in response to demands by local communities. But LGNZ
says, at the same time, central government has almost completely withdrawn from
regional and local economic development.

There were some issues which needed to be urgently addressed, LGNZ said.

There were now significant inequalities between different areas in New Zealand. While
some areas had experienced significant economic growth, others had stagnated. Some
had infrastructure stretched beyond its capacity while others were under-utilised.

"It does not make sense to allow this situation to continue. In general, central
government's economic policies over the last 10 years to 15 years have not taken into
account the economic and social impacts on, and the circumstances of, regional and
local areas. They have hastened the migration to urban centres and the northward drift
to larger metropolitans, particularly Auckland."

LGNZ suggests a collaborative approach between central and local government is
necessary if there is to be effective stimulation of regional development.

A national strategy would establish clear goals and priorities for regional and local
economies. It should be flexible enough to accommodate the needs of different parts of
the country and would encourage regional and local areas to work co-operatively with
one another.

A regional local economic fund could be made available by central government for
approved regional initiatives, including tourism promotion but excluding foreign
investment promotion. Funds could be distributed on a sliding scale formula derived
from regional socioeconomic indicators including average incomes, unemployment
levels, population growth or decline and infant mortality figures.

One problem had been procuring affordable in-depth regional and local economic
information. Forcing Statistics New Zealand to recover the costs of producing regional
and local statistics from users made in-depth data unaffordable for some. LGNZ is
proposing a Waikato programme, where some councils banded together to commission a
report for their region, be expanded nationally by the Government and be a pre-requisite
for all major economic and social decisions.

One of LGNZ's proposals will find instant favour with Associate Industry and Regional
Development Minister Pete Hodgson. He is actively promoting import substitution by
urging government departments to buy New Zealand-made goods.

Increasing the number of migrants settling in regional and local areas has long been an
aim for many local authorities. For a while, the Dunedin City Council had an officer
trying to attract investors from various overseas cities friendly to Dunedin.

LGNZ is calling for the development of further initiatives to encourage migrants to settle
in regional areas.

Aroha Tanirau, senior communications secretary for LGNZ, said the briefing paper to
Mr Anderton was one in a series being prepared for various ministers. It was hoped
further meetings would follow last week's one with the minister.

Arrow hits Melbourne 

                            By Neal Wallace 

                            Dunedin project and construction management company Arrow
                            International is opening a branch in Melbourne, its second Australian
                            office.

                            Company chief executive Ron Anderson said the move followed a
                            foray into Sydney three years ago that allowed it to secure contracts at
                            the Olympic Games complex.

                            From that base, he said, they picked up work in Melbourne and decided
                            to set up an office there.

                            "The company has formed some strong strategic partnerships with
                            corporate clients and most of the work for the first year for the
                            Melbourne office is expected through these partnerships."

                            Mr Anderson said yesterday they had successfully taken the "Dunedin
                            way" of doing business - the culture, value and integrity - to Australia,
                            although it was a competitive market.

                            "We just take our toolbox of Dunedin ideas along to clients and, if they
                            like what we are doing, they take us further," Mr Anderson said.

The company grew from Dunedin to Christchurch and then to Auckland by coat-tailing on existing clients.

Arrow International now employed more than 200 people.

Its roots were in Dunedin, Mr Anderson said.

Eventures trades up 10% 

Wellington: Eventures shares listed yesterday at 65c, compared with the 60c issue price,
and closed at 66c, a 10% premium.

Trading volumes were heavy, with over 5.3 million shares traded in more than 300 trades.

The company raised $30 million through the issue of 35 million shares to 1200 shareholders.

Eventures, chaired by Sky Network TV founder Craig Heatley and backed by News Corp subsidiary
Epartners and Tokyo-listed Softbank, issued another 15 million shares to Telecom, the Warehouse and Todd
Capital at the same price, giving them a combined 6% holding.

Eventures will provide the expertise to bring to New Zealand Internet businesses that Softbank and
Epartners already have a stake in and repackage them for the New Zealand market. Eventually, the
company will recoup its money by selling or floating the New Zealand businesses.

Eventures was initally 80% owned by Eventures Partnership, itself owned equally by Softbank and Epartners
and formed in July 1999 as a $US50 million ($NZ104 million) investment fund to introduce US Internet
companies to new markets. 

Eventure companies have been launched in Britain, India and Australia but this is the first to go public.

Mr Heatley described the float as more of a private placement and said it was partly a branding exercise.
There was no public pool.

Telecom chairman Roderick Deane, Warehouse founder Stephen Tindall and Todd managing director Robert
Bryden are on the company's board.

The prospectus said Eventures was a high-risk investment because of its lack of a track record and its
involvement in an immature e-mail service and an on-line shopping product.

Eventures hopes to launch between eight and 12 companies in its first year, with an average of $3 million
invested in each.

Among the first will be Eloan and MessageMedia, affiliates of Softbank.

Others in the pipeline include Contest2win.com, which offers on-line contests to attract customers, and
Buy.com, a retailing company.

Rise in fee income earned by three largest banks 

Wellington: Buried deep in financial accounts covering New Zealand's three biggest
banks is evidence of what bank customers have long suspected - bank charges have
skyrocketed.

Fee income earned by the Australian owners of the three largest banks - Bank of New Zealand, Westpac
Trust and ANZ - has climbed, figures show.

Third-ranked ANZ reaped $162 million in fees from New Zealand in the six months to March 2000, up from
$138 million in the previous comparable period. That was a rise of more than 17%.

Fees charged by the two largest banks, BNZ and Westpac Trust, also rose but by how much is not clear.
The banks' owners, National Australia Bank and Westpac respectively, do not split out New Zealand fees in
their financial accounts.

However, total loan fees earned by NAB in the six months to March 2000 were 15% ahead of the
corresponding period in 1999, while fees and commissions jumped 9%.

Westpac's lending fee income went up nearly 19% this year, while transaction fees and commissions rose
15% to $A498 million ($NZ607.3 million).

Westpac said a 12% rise in non-interest income within Westpac Trust was mainly due to "increases in
transaction volumes and other fee initiatives". The rise, which relates to Westpac Trust's retail operation,
came despite slow funds management sales in New Zealand, Westpac said.

Business interests served from Wanaka 

Otago businessman and professional company director Ian Farrant has a national profile
in business circles but shies away from publicity. NEAL WALLACE spoke to him
recently.

Businessman Ian Farrant has one of the most picturesque offices in the world.

From his expansive Wanaka home in the lee of the Southern Alps, Mr Farrant juggles
duties between the 12 companies of which he is a director and one regulatory authority
of which he is member.

Three years ago, he and his wife Marlen moved to Wanaka from Dunedin after his 24
years practising accountancy.

It is the most soothing environment for the unassuming, publicity shy Mr Farrant who
prefers to, as he puts it, "get on with the job".

Mr Farrant has chaired or been deputy chairman of 16 companies, state-owned
enterprises or government authorities.

He has been a director of a further 18 and a member of a government authority and
committee which looked into the sharemarket.

In recent years, he has "wound-down" his commitments but still chairs four companies,
is deputy chairman of another two and a director of seven companies, statutory
authorities or local authority trading enterprises.

The appointments have been diverse, from large listed public companies to government
agencies like the Southern Regional Health Authority.

Decisions made on local authority trading enterprises were commercially different to a
public or private company, he said and during the 1980s, state-owned enterprises
operated on a stronger commercial model than today, with little government
interference.

As an accountant, Mr Farrant said he was trained to shift his attention between projects,
to pigeonhole one thing to work on another.

He recalls at one stage being chairman of the New Zealand Refining Company, which
made bitumen, a member of the Transit New Zealand board, whose staff allocated
specific road funding, and a director of Dunedin contractors Fulton Hogan, who laid the
bitumen. 

Although there was no conflict of interest, he said it showed how directors had to be
able to shift between roles.

Mr Farrant has been a member of the Fulton Hogan board for more than 25 years and
has been reported as having a wide knowledge of road building, right down to what
stones make the best surfaces.

He was also reported as saying boards had six main duties: to hire and fire the chief
executive; to be available; to direct capital expenditure; to make sure the company's
capital is intact; to set policy but not manage the business and to monitor the
performance of the executive team against the strategic plan and budgets.

Such is his reputation, he has become something of a hired gun, his talents employed to
solve awkward situations such as waterfront restructuring in the 1980s, health reforms
and, most recently, chairing an independent stakeholder's group overlooking a review of
the wool industry.

He said he brought to the wool industry review the ability to chair a large diverse board. 

The shift to Wanaka was a lifestyle choice in which, he said, the sacrifices they made
were more than compensated for by the idyllic surroundings.

An organised and methodical man, those values have proved invaluable in running his
business interests from Wanaka.

One of the biggest problems he faced was travelling. He owns an aircraft which is leased
to a commercial operator, but is made available to fly him to Queenstown, Dunedin or
Christchurch for meetings or to link with commercial services.

Modern technology also allowed him to keep in contact with companies from his
Wanaka home, although he confesses to not being technology-literate.

While Wanaka might be idyllic, Mr Farrant said it was important to maintain
professional contact with other businessmen.

He is a man of few words - even fewer when questioned about his personal attributes
and qualities.

But, according to his business colleagues, he does himself a disservice.

Leading Dunedin businessman John Gilks said Mr Farrant had a proven business record,
judgement and acumen, qualities which prompted Mr Gilks to rate him as one of New
Zealand's leading company directors.

Otago benefited from Mr Farrant's profile and business status, he said.

Another leading businessman, Eion Edgar, said Mr Farrant's background enabled him to
put things in perspective.

The principle of good governance was the same regardless of the area of business and,
because he had strong principles, he was able to contribute in a variety of fields, Mr
Edgar said.

It is a bonus that he can do all this from Wanaka.

Anderton pleased with policy
                               review 

By Dene Mackenzie

Deputy Prime Minister Jim Anderton is happy with the terms
for the review of how the Reserve Bank looks at the country's
monetary policy.

Mr Anderton was angry last month when the bank increased
interest rates to dampen down inflation and warned he would
hold bank Governor Don Brash personally accountable if
economic growth slowed.

A spokesman for the minister said from Wellington the
Alliance saw as undesirable the use of higher interest rates as
a "blunt instrument" to control monetary policy.

"Every other central bank around the world uses a more
sophisticated range."

The Alliance accepted that with only 7% of the vote it could
not influence monetary policy. But, it could ask the relevant
questions. In some cases, the answers would be clear, he said.

"Anyone nervous about our input into monetary policy is saying
they don't feel confident the monetary policy can stand up to
scrutiny." 

Finance Minister Michael Cullen yesterday announced the review of the bank's ability to implement the
policy targets agreement with minimal disruption to the economy.

The Government was strongly committed to maintaining the operational independence of the bank and some
areas were fenced off from the review.

"The Reserve Bank Act has been in effect for a little over 10 years now and has been effective in
combating inflation. I supported its introduction and continue to support its intentions.

"But, it is appropriate to examine the Reserve Bank's operations and governance to ensure it has the tools it
needs to do its job as effectively as possible with least volatility to interest rates and the exchange rate," he
said.

An overseas reviewer would be appointed in about two weeks.

Among the things for the review to consider were the way the bank interprets and applies the inflation target
(0% to 3%) and whether the bank's communication of monetary policy decisions to the public and financial
markets is as simple, clear and effective as possible.

Greenslades managing director Ron Lewis said he hoped Dr Cullen and Mr Anderton were "big enough" not
to use the review for other purposes.

"If they do, I hope the public of New Zealand are happy to speak out. It looks to me that this is a
performance review of the bank and Dr Brash. It seems to be a very public way of going about the task and
I would feel uncomfortable if I was Dr Brash."

Financial markets were happy with the way the bank was carrying out its duties and would not want to see
too many changes.

"It is early days to try and read too much into it. Dr Brash is doing a good job. We all tend to oversimplify the
task he's got," Mr Lewis said.

Council of Trade Unions economist Peter Conway said the review was long overdue.

"No worker likes to see their pay packet eroded by inflation. But, the single focus on price stability has not
been the answer. The price was paid not just in higher interest rates, but in the reduced investment and job
creation that resulted from the Reserve Bank operating the policy."

Wellington: Eventures had a spectacular debut on the Stock Exchange yesterday, ending 10% up on its issue
price while other technology stocks and the broader market fell.

Eventures closed at 66, up 1c from 65 at the open and 6c higher than its issue price of 60 - that on a day
when other tech stocks weakened and the Nasdaq fell almost 4%.

Chaired by Sky Network TV founder Craig Heatley and backed by News Corp and Tokyo tech
heavyweight Softbank, Eventures is introducing offshore e-commerce brands to New Zealand.

Its first venture is the Internet loan and mortgage company, Eloan.

Cavill White Securities equities dealer Alan Wills said the stock had "very solid" turnover of 5.3 million
shares.

However, the rest of the sharemarket did not share its good fortune, with almost all the leaders losing
ground.

The NZSE-40 capital index closed down 24.4 points, or 1.18%, at 2040.82, on moderate turnover worth $89
million. There were more than twice as many falls as rises - 65 to 30 among the 145 stocks traded.

Smaller stocks also suffered, the NZSE SCI capital index losing 55.64 points, or 1.11%, to end at 4961.48.

Lion Nathan dropped 16c to 452 after a string of healthy rises recently, Mr Wills said.

"Lion Nathan has had a tremendous run on the back of an increased rating on the Australian all ords and the
news it's moving to Australia, and it's probably just run ahead of itself."

Telecom, which makes up a third of the sharemarket, was down 10c to 865, reflecting the overall sentiment
of the market, Mr Wills said.

Carter Holt Harvey was struggling to hold its own, closing down 5c at 179, and three of the four Fletcher
stocks weakened, Forests dropping 3c to 83, Building 4c to 197 and Energy 7c to 508. Paper was unchanged
at 238.

Baycorp showed no signs of recovery, losing another 20c to close at 930. It has suffered losses since
entrepreneur Eric Watson announced he was launching a rival company.

The fears causing Baycorp to plummet were unwarranted, Mr Wills said.

"We don't believe that competition is going to have a huge effect on Baycorp."

"It's been a disappointing day really. The market has lost a lot of ground it's made over the last two days," Mr
Wills said.

Among stocks going against the trend, Tower closed up 4c at 490, Ports of Auckland rose 4c to 490, and
United Networks gained 10c to 600.

Business confidence heading
                   back up: Cullen 

                                        Wellington: Confidence in the economy
                                        appears to be recovering after Government
                                        signals it is listening to business concerns,
                                        Finance Minister Michael Cullen says.

                                        Asked yesterday if next week's budget would restore
                                        business confidence, he said: "I think a good deal of
                                        that has happened already. We have had messages to
                                        this office from various business leaders that they
                                        think things are going better . . .

                                        "People are getting the message very clearly that
                                        there will be changes to the Employment Relations Bill
                                        to remove many of the concerns that business had,
                                        and the Government is not going to put a whole new
                                        range of imposts on business."

                                        The National Bank's monthly Business Outlook survey
                                        late last month revealed its biggest ever monthly drop
                                        in business confidence, with only 15% feeling
                                        optimistic, down from 33% the previous month.

                                        The survey pointed mainly to concerns about interest
rates, which the Reserve Bank has hiked five times in the last six months, but also questioned some areas of
government policy. The Government responded by saying it was listening to business concerns about the
Employment Relations Bill and would make changes.

Labour also indicated it would not support Alliance policies which might impose costs on business, such as an
introduction of four weeks' minimum annual leave, and 12 weeks' employer-funded paid parental leave.

Dr Cullen said there had been a realisation that while the Government and business would not always agree,
it was important not to exaggerate the areas of difference.

He likened the Government and business to Super 12 teams which might compete against each other but
then had to realise that "as far as the external world is concerned, it's the All Blacks versus the rest".

The New Zealand dollar, which had fallen to a 15-year-low against the United States dollar late last month
as confidence in the US economy soared, has recovered this week and was yesterday trading between
US46.73 and US47.72c.

The kiwi has also recovered against the Australian currency and is now buying more than A80c.

Dr Cullen said the state of the currency had more to do with the state of the United States economy than
with New Zealand business confidence.

Currencies had risen against the US dollar because of economic news late last week which suggested the
US economy was not doing as well as previously thought.

"If you take the US dollar out, we are now very much where we were six months ago in terms of currency
alignments.

"It's always good to remind ourselves that the main driver of the New Zealand dollar is what's happening to
the US dollar, nothing internal in New Zealand."

On-line advertising agency being launched in NZ
                                   today 

Bluechilli, an online advertising agency, starts today, providing advertising agencies and their clients with a
facility to manage Internet campaigns from start to end.

The company plans, negotiates, buys and analyses on-line advertising space, as well as supplying creative
and production help where required.

Bluechilli has been set up by The Radio Network. Independent business units director Lynley Marshall said
no-one could continue to ignore the Internet as a communication channel.

"It provides huge opportunities to tailor interactive marketing messages to the right customers."

Bluechilli strategic media director Diane Maxwell said local online advertisers catered mainly for New
Zealanders visiting local sites.

"We know that as much as 70% of the time Kiwis spend on the Internet is on international sites. The
challenge is to get New Zealand brands and New Zealand advertising on to those great international
properties."

IT CAPITAL 
IT Capital reached agreement at the weekend with the Tianjin Venture Capital Preparatory Group to form
the first venture capital investment in the Tianjin region of China.

An IT Capital-led syndicate will contribute $US10.2 million ($NZ$22.2 million) of capital and own 51% of
the venture. 

The company expects significant investment returns by being early investors in China's rapidly developing
Internet and telecommunications infrastructure.

INTERNET STUDY 
Competition is helping New Zealand consumers enjoy cheaper access to the Internet than Australians and
prices here are falling quickly, a new survey has found.

The Institute for the Study of Competition and Regulation survey of Internet access charges in New Zealand
and Australia showed lower prices appeared to be spreading across the Internet quickly in New Zealand,
with as many as one-third more New Zealanders than Australians on-line per capita.

Internet charges in New Zealand have fallen steeply since 1996 with high users - more than 50 hours a
month - benefiting the most. Their monthly charges have fallen to a quarter or less of the 1996 rates. Prices
for low-end users started lower and have fallen by more than half in the same period.

The reasons for the difference were not clear, the institute said. But the complex way in which
telecommunications was regulated in Australia could hold the key.

Contracts to Christchurch

Wellington: Telstra-Saturn yesterday awarded two Christchurch businesses multi-million dollar contracts to
build its telecommunications networks in the city.

Utility contracting business Connetics would carry out most of the network construction, while BICC
General Cable New Zealand would provide cabling. – NZPA

Trans Tasman buys Viaduct
                            property 

Wellington: Trans Tasman said yesterday it had taken "a significant
stake" in the Auckland commercial property market with the
purchase of a major parcel of property in the Western Viaduct
precinct.

The company called it "aggressive" - signalled in its annual report - to move outside
its traditional role of passive investment in New Zealand.

It purchased for an undisclosed sum two large tracts of investment property
covering 22,000sq m.

The purchase involved a swap with the vendor, Starline Group, which received the
Deka building in Hamilton and Eagle Technology House in Willis St, Wellington, as
the bulk of the payment.

Trans Tasman executive chairman Don Fletcher said the company intended
redeveloping the whole viaduct area in conjunction with the overall redevelopment
plans for the area being promoted by Viaduct Harbour Holdings Ltd.

Trans Tasman said tenant demand for the area was strong, as evidenced by the
success of recent office developments on the Fanshawe St frontage adjoining the
Viaduct Basin.

It said its market research indicated a continuing demand for office space in the harbourside precinct.

"Although the America's Cup has been the catalyst for development to date in the Viaduct area, in line with
overseas trends, Aucklanders are gravitating towards the harbour edge for business and lifestyle."

Trans Tasman said that with the successful completion of the 33-level office tower at 363 George St,
Sydney, Trans Tasman had established considerable in-house expertise in development, supplemented by the
major shareholder, SEA Holdings Ltd.

Frucor's debut unlikely to sparkle 

Wellington: Sharemarket volatility is expected to soften Frucor Beverages' debut on the
New Zealand and Australian sharemarkets next week.

Sharebrokers expect the shares to list at the bottom end of the predicted range of $1.95 to $2.25 in New
Zealand.

Frucor, which owns the Fresh Up, Just Juice, Stefan's and energy drink V brands, will begin trading on both
markets on June 13.

It also has the New Zealand rights for Pepsi.

The float is going ahead despite turbulence on world sharemarkets, with key market Wall Street having had a
patchy run in recent months.

That was a prime reason for telco giant Vodafone, biotech firm Genesis and ANZ Bank all postponing
scheduled floats.

Frucor's proposed listing has not been universally well-received, with three brokers forgoing the opportunity
of taking share allocations, partly due to the volatility.

However, other brokers said the float was interesting with a good growth story to tell. It is a well managed
company with plenty of room for growth in the $3 billion globalenergy drinks market.

The risk is that much of the company's growth will depend on the success of energy drink V in offshore
markets. It has already done well in Australia and New Zealand and is expanding into Britain and South
Africa.

Shares in the public pool close today. The shares being offered (62.6 million) represent 50.1% of the
company. A further 9.9% will be offered if the stock is oversubscribed.

The company is valued at between $244 million and $281 million.

Wellington: Telecom, Tranz Rail and Fletcher Energy helped the New Zealand sharemarket to a rare third
consecutive positive close yesterday, although volumes were light.

Martin Edwards, of Frater Williams, said several institutional investors had stopped selling and were now
buying.

"It's nice to see some consolidation. When there is a bit of profit-taking coming into these stocks, there are
still buyers there," Mr Edwards said.

A clearer view of Telecom's restructuring plans had added to confidence in that stock.

"Now that Telecom has gone through that $8 barrier, the rest of the market is getting a little more buoyant."

The NZSE-40 capital index was up 15.33 points to 2054.21 and smaller stocks rose, the NZSE-SCI capital
index rising 47.44 points to 5031.59.

The top-40 index is up 61 points, or 3% from last Thursday.

Yesterday's gain was despite a touch of weakness on American markets on interest rate concerns.

Here, rising stocks outnumbered falls 56 to 45 among the 151 traded, resulting in just $64.58 million in
turnover.

Telecom was up 9c to 803, from 770 just over a week ago, and that is accounting for an 11.5c dividend on
Tuesday.

Tranz Rail was up 25c to 360, adjusting for the financial implications of selling part of its Auckland rail
corridor for $65 million last week. The stock is up more than a third since the middle of May.

Fletcher Challenge Energy, continuing to test its promising Pohokura field, was up 5c to 567.

Among other leaders, Air NZ B shares, Auckland Airport and Fletcher Forests eased 1c to 215 , 254 and 82
respectively. Brierley Investments and Fletcher Paper both rose 1c to 33 and 240.

Rising 2c were Lion Nathan and Natural Gas Corp, to 443 and 142. Carter Holt and Contact added 3c to 181
and 291. Independent News Ltd gained 8c to 400 and Sky City rose 7c to 629.

Mr Edwards said the Internet sector was firm.

"There's a lot more interest coming back. The Ephones, the IT Caps, the Strathmores are all starting to look
a lot firmer."

He said the sector was getting over the fall in America's tech-heavy Nasdaq index in April.

"They're getting over this Nasdaq problem and getting on with making money."

Sector flagship Advantage Group, now among the top-40, shed some of Tuesday's gains, closing down 9c to
305, and Strathmore eased 1c to 28.

But Eventures and IT Capital firmed 1c to 57 and 38 respectively. Ecademy added 0.5c to 7, Ephone was up
2c to 27 and Newcall rose 4c to 44.

In the middle-sized stocks, AMP was up 5c to 2005, Axa Asia and Fisher and Paykel lost 9c to 312 and 678.
Baycorp and the Warehouse put on 5c to 935 and 430, Ebos firmed 2c to 387, Waste Management fell 6c to
352, Tower fell 7c to 576 and the partly-paids were down 2c to 305.

Ryman Healthcare had a curious move, rising a large 19c to 190 but on turnover of just 5203 shares. It is to
conduct analyst presentations soon.

Reserve Bank may follow lead 

By Dene Mackenzie

The Reserve Bank of New Zealand may rethink its expected hike in interest rates in July, following the
decision by Australia's central bank to leave its official cash rate unchanged at 6%, 0.5% below the United
States and New Zealand rates.

The Reserve Bank of Australia made no announcement at its regular money market spot yesterday,
indicating that its board had decided to leave rates unchanged at its monthly meeting on Tuesday.

Economists had widely expected the bank to leave rates on hold this time after raising the cash rate in four
stages by a total of 1.25% since November.

Bank of New Zealand economist Geoff Mason said the BNZ expected the Reserve Bank of New Zealand
to leave the official cash rate unchanged in July, pending a full reassessment. 

"That said, we don't expect the Reserve Bank to be side-lined too long. With monetary conditions still easy
and inflation risks high, we expect the Reserve Bank to resume tightening at the August MPS, lifting the
cash rate by 50 basis points."

Throughout the "dollar bloc countries", sentiment towards tightening appeared to be changing, he said.
However, the BNZ saw the latest developments in New Zealand as more of a pause in the tightening cycle
than a sign the Reserve Bank's work was largely done.

"The OCR moves since November have been substantial and quite rapid, out-pacing similar moves in other
dollar bloc countries, including the US. But, with confidence down and the balance of risks on growth having
also shifted, some of the urgency is now likely to go out of the Reserve Bank's tightening."

Foreigners sell NZ bonds 

Wellington: Foreigners bailed out of New Zealand government bills and bonds in April,
cutting their holdings to 38% from 40% at the end of March.

Currency dealers have complained the recent weakness of the New Zealand dollar showed not only that
foreigners had no reason to invest in New Zealand but were pulling out. The value of foreign holdings now
stands at $9.27 billion, from $9.68 billion at the end of March.

Reserve Bank data shows that at the end of February, 42% of government securities were owned offshore
and in April 1999 the figure was 43%. 

In previous years, offshore ownership of around 60% has been common.

The New Zealand dollar opened this year around US52.50c and slid in April from above the US50c level to
14-year lows below US46c. Local dealers blamed offshore perception of the new government, economic
growth concerns, business confidence and interest rate differentials with the US. 

In recent days, however, the New Zealand dollar has recovered to above US47c as America's grip on global
investment has loosened.

7 July

Profits up 27% 
Invercargill: Sheep and beef farm profitability rose 27% in Otago and Southland last year, the Meat and Wool Service says. 
The before-tax profit for farms (not including dairy) in the region averaged $50,400 in the 1999-2000 season, reflecting higher 
weights and improved prices. The national average was $46,400 a farm. 
The provisional figures confirm what rural commentators have been suggesting. 
Economic service executive director Rob Davison said figures published in the New Season Outlook showed 1999-2000 was a top 
season for animal productivity, export prices and farm profitability. 
"This is a sharp contrast to the rest of the 1990s which was the most difficult low-profit decade to farm through in 50 years." 
Lamb and sheep weights set new records in the past year at 16.52kg and 23.41kg respectively. At $5300 a tonne, export prices for 
lamb were 6.3% up on the previous year. Total lamb product export earnings were up 9% to $1.72 billion for the year. 
Export beef prices lifted by 17% to $4350 a tonne while total beef shipments increased 9%, meaning beef products (including hides) 
provisionally brought in $1.72 billion, up 21%. 
The Otago-Southland region has 28% of the country's sheep flock and 10% of the beef herd. High breeding ewes means the region 
produces 32% of the country's lambs. - NZPA

ERB to be clarified: Cullen 

Michael Cullen 
Wellington: Finance Minister Michael Cullen says the Government anticipates any "negative side-effects" of the Employment 
Relations Bill will be removed by the select committee considering it. 
But Dr Cullen told the Employers and Manufacturers Association in Auckland the objective of the original Bill, cited as one reason for 
a loss in business confidence, would remain. 
The select committee would make the intention of the legislation clear, removing ambiguity, he said. 
Dr Cullen could not give precise details about the final changes because "at this stage nobody knows what they will be". 
The Bill did not have radical objectives, he said. The principles of good faith, mutual trust and confidence and fair dealing were basic 
objectives. 
The Government had identified a cluster of "lightning rod" issues that had attracted strong employer criticism, Dr Cullen said. 
He reiterated that independent contract workers would not be forced to become employees under the legislation. 
While the information technology industry believed the Bill discouraged the use of fixed-term contracts, Dr Cullen said the intention 
was to prevent abuse: to prevent employers locking workers out of service-related entitlements by cycling permanent employment 
through a series of fixed-term engagements. 
To what extent employers could talk to employees directly during collective bargaining had also been an issue for employers. 
Employers were also opposed to opening their books as an obligation of good faith. 
"We have received some useful suggestions regarding how this can be achieved in practice," Dr Cullen said. 
He added defining union access to workplaces was central to the policy that it should be allowed. 
The select committee needed to find a way to allow access but restrict it to proper purpose and maintain respect for safety, security 
and confidentiality. 
"Both sides will want a different formula: there will need to be a compromise on this issue," he said. 
The conflicting rights to strike and to employ also had to be balanced. 
Employers should not be able to force employees to do the work of striking workers, but nor should workers who volunteered to do 
other jobs be prevented from doing so. 
Dr Cullen said the Government had listened to business concerns over the Bill, but while it had been prepared to make some changes 
the core policies "have been maintained". 
The legislation would be in place no later than October 1. 
It was originally planned to be in force on August 1, but had to be delayed when the Government decided to make changes

PPCS says options open on Richmond shares 


Stewart Barnett 
By Dene Mackenzie 
Dunedin meat processor PPCS has still not agreed to sell its shares in Hawkes Bay meat company Richmond, despite a media 
statement from Richmond chairman Bob Croker implying that to be the case. 
The statement from Mr Croker, released without consultation with PPCS, said PPCS and its associates (HKM) were seeking 
expressions of interest in the purchase of its 34% to 36% holding in Richmond, thought to be worth $26.6 million. 
PPCS chief executive Stewart Barnett said last night the Dunedin company was seeking expressions of interest but that implied only 
that it was keeping its options open. 
"If we are forced into a position where we have to sell our shares quickly, we have to know who has an interest in buying them. It 
doesn't have anything to do with selling the shares. 
"We are still of a view that we haven't transgressed their [Richmond's] constitution," he said. 
PPCS was alleged to have breached Richmond's constitution in the way it went about purchasing some of the shares acquired in its bid 
to secure a 51% shareholding in the company. 
Last week, a panel of Richmond's independent directors, led by Mr Croker, ordered that the total holdings of PPCS and its subsidiary 
HKM must be sold to independent parties within one month. If not sold within one month, Richmond would exercise the constitution's 
power-of-sale clause. 
Mr Croker said in the statement PPCS and its associates were seeking expressions of interest in its shares by 5pm today and were 
expecting offers above $1.90. 
"Richmond intends to do everything it can to assist PPCS in facilitating an orderly divestment of the shares at fair value and a 
constructive outcome for both parties. 
"The acquisition breached Richmond's constitution and that breach is incapable of being remedied, so the shares must be sold," he 
said. 
Mr Barnett said no decision had been made on selling the shares. All options were being kept open.

More FM profit down, TV3 slips into loss 
Wellington: TV3 slipped into a loss while the More FM radio network reported a lower profit in the three months to May 31, Canada's 
Can West Global Communications Corp reported yesterday. 
TV4 reported a smaller third-quarter loss than for the corresponding period a year earlier. 
Can West's group net earnings for the third quarter jumped to $C104.5 million ($NZ154.3 million) - C69c a share fully diluted - up 
from $C44.6 million from the same period a year earlier. 
But TV3 was not a contributor to the better result, reporting a broadcast operating loss of $C930,000 ($NZ1.37 million) for the period, 
against a profit of $C620,000 last year. 
TV4, classed by Can West as a project under development, reported a broadcast operating loss of $C836,000, reduced from $C1.03 
million a year earlier. 
More FM's broadcast operating profit was trimmed to $C825,000, down from $C938,000. 
New Zealand revenue was weaker in the third quarter, with TV3 reporting $C16.47 million (against $C16.81 million), More FM 
$C4.76 million ($C4.87 million) and TV4 $C1.05 million ($C1.15 million). 
For the nine months to May 31, all three branches reported a deterioration in their broadcast operating results. 
TV3's profit was $C4.39 million (versus $C5.03 million), More FM's profit was $C3.77 million (versus $C3.79 million) and TV4's 
loss was $C2.41 million (versus a loss of $C2.22 million). 
Can West offered no explanation for the weaker performance and New Zealand dollar results were not provided. 
During the quarter, Can West moved to 72% ownership of radio company Radio Works New Zealand Ltd. - NZPA

Banks reap $1.6b profit 
Wellington: Banks have shaken off the effects of the Asian financial crisis and a slowing domestic economy, reaping after-tax profits 
of $1.6 billion in 1999, the Reserve Bank says in its June bulletin. 
The banking sector was "in an extremely sound overall position . . . and has performed strongly over the last year, recording robust 
profitability, strong balance sheet growth and high asset quality while maintaining sound capital adequacy," the central bank said. 
Strong profitability was underpinned by lending volume growth and continued efforts in cost containment. 
Net profit after tax for the sector rose 32% to $1.6 billion. Return on assets improved from 0.89% in 1998 to 1.1%, which was ahead 
of the 1% benchmark for international banks. 
The comparisons were influenced by two abnormal items: in 1998, one bank recorded a $120 million restructuring charge and last 
year, profits were boosted by $107 million from the sale of Bankers Trust funds management business. 
Interest-earning assets increased 13% over the year, compared with a 4% rise in net interest income, and there was a broad-based 
growth in total assets to $158 billion, up 12%. 
The medium-term outlook was favourable but the bank pointed to "vulnerabilities" such as the impact of technological change and 
competition, a rising interest rate environment and the departure of some skills and resources offshore. 
Interest margins were likely to be squeezed further as the number of non-bank competitors continued to grow. The strength of the 
industry was also encouraging niche operators to compete more aggressively for personal banking business. -

Foreign capital `affecting BOP' 
Wellington: Foreigners pumping too much money into New Zealand may be behind this country's worrisome balance of payments, 
independent economic think-tank Berl suggests. 
Writing in its latest monthly newsletter published yesterday, Business and Economic Research economists say that: "Traditionally, we 
have relied on export receipts to offset at least part of that [payments] deficit. However, the magnitude of the imbalance is increasingly 
recognised as a major problem. 
"Indeed, many people have asked whether capital inflows over the last decade have been causing the current account deficit, rather 
than the other way round - ie whether the willingness of foreign banks and investors to put funds into New Zealand has held up an 
otherwise unsustainable exchange rate and trade deficit." 
While a sustained depreciation in the currency was helping the export side of the equation, "the fall in the kiwi and the rise in interest 
rates are price adjustments, giving foreign investors higher returns in recognition of the increased risk". 
"If this doesn't lead to an improvement in the BOP [balance of payments], we need to ask whether the next adjustment will be a 
quantity one - that is, a slowing of foreign capital inflows?" 
The growth in the investment income deficit could not continue indefinitely. "Foreign investors won't continue to fund a country 
which is so far away from any balance on its international trade. Falls in business confidence will dent retention of profits and new 
inward investment," Berl says. 
"So, in the near future, inter-bank lending may play a much bigger role in funding the deficit. In other words, we become more reliant 
on Australian bankers than American corporate investors." 
The BOP correction could take the form of reduced willingness of Australian bankers to permit an expansion of lending by their New 
Zealand branches. 
"The effects would be felt partly through a correction in asset prices but also through a brake on producers' abilities to obtain credit for 
increased investment and/or employment expansion," the economists say 

Wellington: Investors were abandoning Telecom yesterday in a wave of selling overseas, sending the sharemarket titanic yet lower in 
the water and sucking the key market index down with it. 
"It was a colossal day for the market, dominated by Telecom, where over 20 million shares were traded. After hitting an intra-day low 
of 693, it finished at 700, down 18c," Cavill White Securities equities dealer Alan Wills said. 
Of a $240 million market turnover, Telecom accounted for $147 million and clocked up a 32-month low. 
"Outside of Telecom, there were really just minimal movements in the leaders. Fletcher Energy started the day better, getting up to 
680 then fading to finish down 4c at 660. There was also good turnover in Fletcher Forests, which was down 2c at 78." 
But the whole focus of the day was on Telecom, which has been mostly in retreat since April and has not shown a rise for a week. 
"A number of factors are at work here. Certainly, we are getting very heavy offshore selling, as evidenced by the very large volume," 
Mr Wills said. 
"The future direction of the market is dependent on where Telecom ends up. There are a number of issues at play. There is talk of 
broker downgrades in terms of earnings forecast, talk about dividend cuts, uncertainty as to what the strategy of the company is, trying 
to create some growth in its earnings . . . " 
Another telco, Telstra, which has been showing improvement, lost its footing yesterday with its head shares falling A9c to 916 and its 
instalment receipts A15c to 525. 
The benchmark NZSE-40 capital index closed down 7.98 points, or 0.39%, at 2040.63, with gainers outrunning losers by 61 to 44 
among 157 stocks traded. 
For those looking for good news, AMP continued its recovery with a 79c jump to $23.05 and The Warehouse expanded 15c to 545 
despite the release of soft national retail sales data for May. 
Carter Holt Harvey added 1c to 180, Contact Energy 2c to 290 and Independent Newspapers 6c to 415. Fletcher Paper firmed 1c to 
247 and Fletcher Building 5c to 235. 
Among the losers were Fisher and Paykel Industries, down 3c to 665, Lion Nathan, 8c to 472 and Sky Television, 7c to 400. Brierley 
Investments eased 1c to 32 and Westpactrust partly paids dropped 15c to 825. 
Newly listed beverage company Frucor remained on the rise, adding 3c to 173 after saying it was launching one of its main brands in 
Ireland. 

Hard sell in electricity market 
Auckland: A printing firm persuaded to switch electricity retailers after being offered serious savings on its power bill was shocked by 
the new contract. 
The Auckland-based firm says the contract's fine print showed savings promised by the commission-based salesman were as illusory 
as snake oil medicine in the Wild West. 
Hard-sell tactics are becoming common as competition heats up between power retailers in Auckland, New Zealand's largest 
electricity market. 
The printing firm's complaint and others are being investigated by the Commerce Commission for alleged Fair Trading Act breaches. 
The commission's manager of fair-trading issues, Rachel Leamy, said electricity retailing was one of its target areas this financial year. 
There are nine retail brands vying for Auckland's 400,000-odd customers. 
Two network companies cover Auckland. 
Vector in Auckland central and south has 260,000 customers, while United Networks (former Power New Zealand) has nearly 
177,000 electricity customers in the north and west. 
The two incumbent power retailers, Mercury Energy and Transalta, have haemorrhaged a considerable number of customers but are 
far from bleeding to death. 
Other players include the generator/retailers Contact, Genesis, Meridian, Trustpower, First Electric, and resellers Empower and 
Energy On Line. 
Contact has just paid $23 million for Empower to gain a foothold in the Auckland market where it previously had only 2000 
customers. It wants to spread the start-up retailer's door-to door selling tactics nationwide. 
Mighty River Power, owner of the Mercury and First Electric brands, estimated it lost 18,500 Auckland customers in little more than a 
year since customer profiling came in. It still has 91.5% market share in Vector's area. 
Transalta, which bought Power New Zealand's retail arm, has since lost 15,000 Auckland customers. 
Mighty River general manager retail John Foote said the two incumbents were "on top of the mountain". 
"They can only go one way." 
A New Zealand Institute of Economic Research report to the Government's electricity inquiry said prices had increased 9% relative to 
industry costs since 1994. 
Ministry of Economic Development figures show Transalta's charges for an average domestic electricity consumer have risen 8% or 
$87 from April 1998 to May this year while Mercury's prices remained unchanged. 
United Networks' lines charges alone during the same period rose $35 or 7% while Vector's dropped by $5 or 1%. 
Beneficiaries from retail competition so far have been the bigger power users - commercial and industrial customers where the 
margins were traditionally higher. While the competition is now shifting to cherry-picked residential customers, industry players say 
margins are already thin. 
David Caygill, head of the Government inquiry, said consumers would not necessarily see lower power bills as a result of its 
recommendations. 

In brief 
Ecademy venture 
Wellington: Listed Auckland Internet company Ecademy is entering joint ventures with corporate educator and trainer Forum 
Corporation. 
Ecademy has signed a memorandum of understanding with a Forum subsidiary to distribute corporate trading material on the Internet 
using Ecademy's' live interactive learning platform. - NZPA 
Frucor in Ireland 
Wellington: Newly listed beverage company Frucor has launched one of its main brands in Ireland. The move follows expansion into 
Australia, South Africa and Britain over the past year and a half. 
"Consumer research . . . indicates V will experience a similar level of positive consumer uptake as has been experienced in other 
markets," managing director Mark Cowsill said in a statement. - NZPA 
Fly Buys for children 
Wellington: The little people have got their wings. 
From August 1, Fly Buys will allow members to use points to buy children seats on Air New Zealand flights. Children aged between 
two and 12 can travel for two-thirds the Fly Buys points of adults, though children under 5 must be accompanied by an adult. - NZPA 
Phone preferred to Internet 
Wellington: The telephone, rather than the Internet, is still the best method for contacting customers, according to a new survey on 
customer service. 
The Cap Gemini Ernst and Young survey, to which 178 organisations responded, found that 94% had e-mail but the telephone was the 
preferred method of contact for customers. Only 4% of customer contacts were received by the Internet, with 91% over the phone. - 
NZPA

Lean time for retailers: economists 
Wellington: Retailers could be in for a lean few months, economists suggested yesterday. 
Commenting in a newsletter after yesterday's release of retail sales data for May, Bank of New Zealand economists said: "The sharp 
fall in consumer confidence in the June quarter does not bode well for spending and retailers are likely to face some relatively lean 
months ahead before sentiment improves later this year." 
Deutsche Bank said :"The trend towards weaker retail sales remains clear, reflecting the slump in consumer confidence and the 
downturn in the building sector." 
At Westpac Trust, the economists assessed that retail sales volume in the quarter to June was about flat. "This translates into very 
weak, to flat, private consumption growth." 
However Westpac Trust expects the Reserve Bank to hike its official cash rate next month and in December, unless the softness turns 
out to be a permanent feature. This week, the central bank decided to leave the rate unchanged at its regular review. 
Statistics New Zealand reported yesterday that seasonally-adjusted retail sales increased 0.8% over the month of May to $3.58 billion. 
Excluding motor vehicle sales, the rise was a negligible 0.2% compared with the 0.4% estimate based on early survey responses

Sutton shakes a gloved fist at Telecom over rural
                               obligations 

                         Wellington: Rural Affairs Minister Jim Sutton has made it
                         clear the Government will be the iron fist in the velvet glove
                         when it comes to making sure Telecom fulfils its obligations
                         to provide up-to-date telecommunications systems to rural
                         people.

                         He said he did not support calls to get rid of Telecom's Kiwi Share
                         obligations, designed to ensure rural people had the same level of access to
                         telecommunications technology as others.

                         "Its provisions need to be able to be updated. It [the Kiwi Share] should be
                         regarded as a living document, a bit like the Treaty of Waitangi."

                         He said Telecom wanted it to gradually lapse into obsolete irrelevance. "It's
                         my view that would not be appropriate at all."

                         In the end, the Government was the regulator.

                         "I think we could be pretty determined. The public interest is very much
                         involved here, and it's certainly in the public interest that rural New Zealand
                         be a part of the new economy."

                         But Mr Sutton said settling the debate need not be acrimonious. He
believed Telecom could realise, as did state-owned enterprise New Zealand Post's subsidiary Rural Post,
that a "huge" competitive advantage could be viewed as an asset and an opportunity.

"I think it is capable of being negotiated. I think it is fair that Telecom pay a price [the Kiwi Share obligation]
in return for its extremely dominant market position. I think it has an obligation that stems from that, and the
Kiwi Share spells it out to some extent."

But Mr Sutton said that technological progress meant the Kiwi Share needed to be renegotiated.

Evolving technology would resolve the issue to some extent. "But that isn't to say we are going to get a
satisfactory result by turning our backs on it and waiting for a technology fix."

Telecom was bound to try to minimise its Kiwi Share obligations, and he was bound to try to maximise them.

"But I don't think that should be an acrimonious discussion. As New Zealand Post found when the issue of
rural delivery came up and they went through a stage of trying to minimise their obligations. Then they
looked at it again and saw their position as the only supplier who could say it delivered to every householder
in the community as a huge competitive advantage."

Asked at what point delay in upgrading telecommunications services to rural people would become
unacceptable to him as minister, Mr Sutton said Hugh Fletcher's inquiry into telecommunications needed to
be completed first. "I don't want to start imposing, or even implying, deadlines on Telecom until then. I want
us to have a constructive engagement."

Earnings report causes price drop 

NZPA Staff Correspondent

Wellington: The Warehouse shares took a tumble on fourth quarter sales figures released yesterday and later
the company announced its planned purchase of Clint's Crazy Bargains and Silly Solly's in Australia had hit a
"minor" snag.

The company's shares, which had climbed sharply when the company announced its move into Australia,
dropped 35c to $5.40. But it appeared the fall was on the sales figures that showed the Warehouse's growth
rate has eased.

Chief operating officer Greg Muir said he fully expected the Australian purchase to be settled next week.
The deal had been due to go unconditional on Monday.

Mr Muir said that as a private company, Clints Crazy Bargains and Silly Solly's did not have things "lined up"
like a public company.

"I'm really confident it will be [finalised] next week some time," Mr Muir said. "It's just a matter of ticking a
lot of boxes, crossing a lot of `t's, and dotting a lot of `i's.

"It's all procedural stuff. It's nothing untoward at all."

The up-front acquisition cost of the chains, comprising 114 stores, is $A105 million ($NZ136 million) with a
potential earn-out of up to $A24 million in addition to this if earnings targets are met by the year 2003.

Cavill White Securities managing director Don Turkington said the share price fall was a reaction to the sales
report.

"It was considerably lower than broker expectations.

"There appears to be quite a market slow-down in same store sales growth in the red sheds - it is unusual for
the Warehouse to report same stores growth in single digits."

The effective Australian settlement date will remain August 1.

The sales figures showed same store sales rose 5.8% in three months to July 31 compared with the same
quarter a year ago.

Total sales rose 10.2% to $239.3 million in the quarter.

Sales for the 12 months ended July 31 were $1.072 billion, up $142 million, or 15.3%.

"Our sales growth in the quarter of 10.2% compares favourably with the overall retail sector where total
New Zealand retail sales growth was only 0.3% in April and 0.8% in May," Mr Muir said.

FCL denies imminent sale of
                    Energy division 

NZPA Staff Correspondent

Wellington: Fletcher Challenge Ltd yesterday moved to dampen strong market rumours of an imminent sale
of its Energy division.

Chief executive Michael Andrews told the Stock Exchange in response to Energy's steep share price rise in
the past two days (over 10% at one point), that the company knew of no reason for the movement.

"Whilst we are well on track to completing the dismantling of the group's targeted share structure, we have
nothing imminent to announce in relation to any of the group's three divisions," he said in a statement.

Mr Andrews reiterated the board's commitment to keep shareholders informed of progress.

Energy's share price soared 55c to $8.01 at one stage with initial rumours that Royal Dutch Shell was going
to offer $8.50 a share and then rumours it would bid $10 a share.

But even before Mr Andrews' statement, the company had moved to quell the rumour and the price had
begun to ease. It closed up 22c on Thursday's price at $7.68. Yesterday, when the latest rumour got traction,
the price rose 31c.

Fletcher spokesman Clive Litt told NZPA: "The situation is we are going through a process. The firm date
specified is December for concluding the process.

"We are working through the process and when we have something to say we will but no announcement is
imminent."

The oil and gas explorer's shares rose to 54c in early trade before easing to be ahead 44c at $7.90 - a gain of
more than 10% since Wednesday's close.

"It's the old story, that Shell is going to have a crack at it. That's what the market's saying. We haven't got
anything to confirm it though," said Cavill White's Wayne Schuler yesterday morning when the price was
surging.

He said people were reinvesting the money they received from Fletcher Paper following the takeover by
Norske Skog.

He said initially the rumour was that the bidder would pay $8.50 a share "but everyone is now having
themselves believe it is a $10 bid".

The shares climbed despite a sharp drop in Fletcher's US investment Capstone, of $US6-1/8 to $US41 a
share, compared with a year high of $US70-1/8. Recent gains by Capstone had been a driver for Fletcher
Energy shares

"The stock even at $8 has 25% in it at least if there was to be any corporate activity," said Peter Stokes at J.
B. Were.

"Fletchers have been pretty good at signalling to the markets but at the same time not releasing any sensitive
information. I think the flags are up just saying we are getting closer and closer to some sort of tangible
result."

Last month Shell oil executives flew to New Zealand to check out Fletcher Energy's Taranaki operations in
what was understood to be preparation for making a takeover bid.

Taranaki SB linked to `People's Bank' 

New Plymouth: The Taranaki Savings Bank says it may play a role in the "People's Bank", which is
expected to be operating by the end of the year.

TSB Bank managing director Kevin Rimmington said he could not rule out the possibility of the
Taranaki-based bank being involved in the bank being promoted by Deputy Prime Minister and Alliance
leader Jim Anderton.

"We've had discussions on a number of issues regarding banking with other organisations, including New
Zealand Post, but I want to make it quite clear we would do nothing which would put the bank's ownership in
any risk. We're not for sale," Mr Rimmington said. 

Mr Anderton has been in Taranaki this week. He was tight-lipped yesterday on any connection between the
TSB and the People's Bank, preferring to say discussions were progressing with several institutions. 

"There will be a people's bank - you can bank on that and it will be open before Christmas," he said.

Mr Rimmington said there was already a relationship between TSB and New Zealand Post.

Reprieve for Brierley investors 

Wellington: All but a few hundred Brierley Investments shareholders will win a reprieve from the foreign
investment fund (FIF) tax on capital gains if recommendations from Parliament's finance and expenditure
select committee are adopted.

In reporting back to Parliament on tax legislation this week, the select committee also indicated the
Government plans a broader review of the 12-year-old FIF tax rules within two years.

An Organisation for Economic Co-operation and Development study into harmful tax rules would be taken
into account in the government review, it said.

In the meantime, Brierley shareholders holding less than $50,000 worth of shares would be excluded from
the FIF regime, up from the $20,000 shareholding threshold proposed in the first draft of the Taxation (FBT,
SSCWT and remedial matters) Bill.

This means about 400 Brierley shareholders will be affected by what the company had described as "an
unfair side effect" of moving overseas, down from an estimated 5000 who would have been hit by the initial
legislation.

The select committee also confirmed the exemption would apply only to individuals and not extend to trusts.

"We see it as a great step forward and we congratulate the select committee on the decision," Brierley's tax
manager John Payne said. 

Although Brierley had sought a $100,000 threshold, it welcomed any relief provided to shareholders.

The FIF tax regime was introduced in 1988 amid government concerns that taxpayers were investing
overseas and structuring their affairs to avoid tax on their foreign income. –

Technology stock takes off 

By Neal Wallace 

Stock in the Dunedin biotechnology stock, A2 Corporation, increased in value by over a dollar this week,
hitting $4 at the end of trade yesterday. 

It has been a meteoric rise for the company started by local businessman Howard Paterson, which was
floated with eight million shares in early April at 5c each, but early this week hit $2.90.

The rapid rise of the stock has been even more remarkable given the paucity of information about its
activities.

Company spokesman David Parker confirmed to the Otago Daily Times this week that A2 held intellectual
property rights to new milk product technology. He declined to comment further.

The Otago Daily Times confirmed in May that A2 intended producing milk containing the A2 protein which
research indicated might slow the onset of diabetes and artery disease. 

Forsyth Barr's Dunedin manager, Shanta McPherson, said it was difficult to value the company but there
was plenty of investor momentum.

"It is certainly a bit of an eye-popper to see stock move like this," he said.

The stock is trading on the second board of the exchange but the original share script was tightly distributed
and there was limited liquidity.

Govt role `crucial' to business 

Wellington: The Government's role in removing obstacles to business and economic
growth was crucial as New Zealand faced shareholder wealth losses estimated at more
than $1 billion a year, Institute of Directors chief executive David Newman said this
week.

"I don't think business is looking to the Government to solve our problems, but they certainly have to set the
environment for business to thrive and grow," he said.

Mr Newman was responding to updated ANZ Bank research estimating the sharemarket's top 40 companies
lost $1.8 billion in shareholder wealth last year, up from the $1.2 billion estimated in research earlier this year.

Based on the economic value-added model - broadly a company's tax-paid operating profit less the cost of
capital - the research estimated cumulative losses among NZSE-40 companies at $15 billion since 1990, not
counting the $4 billion in market value lost by Brierley Investments.

Business groups have lobbied successive governments about ballooning compliance costs associated with tax
and other corporate regulations, saying they are making it increasingly difficult to expand and create jobs.

Politicians have promised to tackle the problem, but compliance costs are worse than ever.

Mr Newman said the business sector accepted it had to face up to its own challenges, but government policy
settings remained a key part of the overall business climate.

"The question is whether the bureaucrats have that capacity any more," he said. "The public service has
been run down so much that it will remain an issue for some time."

The economic value-added model was just one way of measuring corporate performance. The Institute of
Directors was teaming up with the Institute of Economic Research to look more broadly at New Zealand's
track record in this area.

Research institute director Alex Sundakov said this week the project was in the early stages and needed
more funding. But he hoped it would be completed within a year.

"We are clearly not getting the return on capital in New Zealand that is available in other countries," he said.
"Our problem hasn't been a lack of investment - it is higher than in other countries - but we don't get the
return available elsewhere."

It was important to analyse whether the problem stemmed from New Zealand's "being good at things that
don't return a lot of wealth" or whether the relative performance of New Zealand companies fell short of
competitors in the same industries overseas.

In its research issued this week, ANZ Bank said the Government had an effect on corporate performance
through its leadership role in shaping attitudes and its legal, regulatory, state ownership and tax functions.

And it had a warning for the reformist Labour-Alliance administration.

"Government should remain cautious of trying to pursue too many different objectives in its review of policies
that impact on corporate performance - for example, in the competition and securities areas."

Profit still rises 

Wellington: Woolworths New Zealand's first half profit increased to $22 million from
$17 million in the 1999 period despite a drop in sales revenue.

Revenue dropped 9.5% to $788 million.

Meanwhile, Hong Kong-based parent Dairy Farms International - whose New Zealand supermarket brands
also include Big Fresh and Price Chopper - posted a $US51 million ($NZ113 million) after-tax loss,
compared with a $US33 million profit in the 1999 first half.

Chairman Simon Keswick said the second half would remain difficult, with a price war in Hong Kong, and
continued investment needed to reposition the Franklins stores in Australia.

In its interim report the company said the food industry had been engaged in a deep and prolonged price war
in Hong Kong and Australia. Franklins' sales had declined at a time when the company was investing in
repositioning its business.

The company's underlying profit margin dropped to 1.3% from 3.8% in the 1999 half and earnings per share
dropped to negative $US3.06 from $US1.77.

Directors said no interim dividend would be paid because of the capital investment programme

Four out of 10 invest 

Wellington: More than four out of 10 New Zealanders own shares, the third-highest
level in the world, according to a stock exchange survey. 

When all forms of share ownership were considered, 44% of New Zealanders had some form of direct
investment in shares, after Australia with 54% and the United States with 52%.

Men, Wellington residents, the highly educated and well paid were the most likely to invest in equities.

Exchange managing director Bill Foster said the survey also showed that New Zealanders had
proportionately less investment in products like managed funds and superannuation, and more money
invested in property.

In New Zealand, men were more likely to own shares directly at 35% than women (26%). Most investors
were older than 35.

Of those respondents with an income of more than $50,000 a year, 43% invested in shares compared with
27% in the $30,000 to $50,000 bracket.

Residents of Wellington were much more likely to own shares (38%) than Aucklanders (28%), who were
also behind Christ-church investors (30%).

Only 29% of New Zealanders had superannuation investments compared with 73% in Australia, where
superannuation investment is compulsory.


Wellington: The Warehouse plummeted 35c to 540 yesterday after reporting single digit sales figures for the
fourth quarter, on a day when Fletcher Energy and Baycorp surged ahead.

The Warehouse said its same store sales rose 5.8% in three months to July 31 compared with the same
quarter a year ago. Total sales rose 10.2% to $239.3 million in the quarter.

However, these results were not as good as expected, Cavill White Securities managing director Don
Turkington told NZPA.

"It's basically a reaction to their sales report out today. It was considerably lower than broker expectations.

"There appears to be quite a market slow-down in same store sales growth in the red sheds. It is unusual for
the Warehouse to report same stores growth in single digits."

After the sharemarket closed, it was reported there had been delays in settling the Warehouse's Crazy
Clint's and Silly Solly's deal, but Dr Turkington had not heard those reports and doubted they contributed to
yesterday's dive.

The NZSE-40 Capital Index was down 1.66 (0.08%) to 2129.46, while smaller stocks advanced, with the
NZSE SCI Capital Index up 29.66 (0.56%) to 5367.63.

Turnover totalled $121 million, with rises outnumbering falls 54 to 44 among the 152 stocks traded.

Baycorp hit a new high yesterday, soaring 90c to 1360 on turnover worth $4.6 million, continuing a strong
upwards trend.

Since the beginning of May, the stock has increased 39% from 979.

Fletcher Energy also had a strong day, closing up 22c at 768 yesterday after surging 54c to $8 in heavy
traffic yesterday morning, on top of a 31c jump on Thursday.

The stock turned over 3.1 million shares worth $24 million.

Scott St John, of Credit Suisse First Boston, said there had been talk about the Fletcher group's restructuring.

"The market is gaining enthusiasm for whatever result that may be, whether it's a takeover or whatever."

Building was up 4c to 237 and Forests rose 1c to 87.

Mr St John said high-growth stocks like GDC, Baycorp and Frucor all had a strong day yesterday.

"They're all stocks with high earnings momentum," he said.

GDC rose 20c to 470 and Frucor closed 7c stronger at 235.

Among the top 10 stocks, Auckland Airport rose 7c to 282, Fisher and Paykel gained 5c to 730 and Telecom
was up 2c at 727.

However, Carter Holt Harvey came off 5c to 190, Contact softened 7c to 260 and Independent Newspapers
lost 10c to 415.

Lion Nathan fell 2c to 490 and Montana 5c to 238.

Among other stocks, Sky City was up 8c to 728, Transalta and Tranz Rail both gained 4c to 275 and 388
respectively, and Advantage rallied 11c to 286.

Mana trust facing dissent over NGC deal 

Wellington: Hutt Mana Energy Trust faces a tough campaign from within its own ranks in its deal with
Natural Gas Corporation (NGC). 

Trustee Molly Melhuish said the deal was so bad that it would be better for the trust to be wound up.

The deal will result in Transalta NZ and NGC merging into a company in which the trust will have a 9.7%
stake. That put the trust's stake below the strategic 10% level, Mrs Melhuish said.

At present it has 15% of Transalta.

The trust which last year criticised foreign control of power companies, had allowed an Australian-controlled
power firm to win control, she said. 

She also opposes the trust's plan to give out $2.4 million in charitable grants in the next year.


Port ready for 'super' ships
By Simon Hartley

Port Otago is confident Port Chalmers can handle the new generation of 
"super" container ships under construction.
Marketing manager Iain Lindsay said the port had the infrastructure in 
place and was "well positioned" to receive the
super container ships.
Ten super-sized, 290m long container ships carrying 4100 standard 6.1m 
containers - 35% more containers than
those carried by current vessels - are scheduled to be servicing New 
Zealand by the end of 2002.
Mr Lindsay ruled out reclaiming land to allow for the increased length of 
the ships, and said there was no shortage of space to store containers. But Port Otago was 
investigating dredging the 
channel, he said.
"We have been working closely with Nedlloyd on the new ships.
"Until they have finalised the 'design
and build' aspect of the vessels it is difficult to know the exact 
requirements," he said.
 He declined to speculate on whether Port Otago would need a third $20 
million-plus container crane to meet turn-around demands.
There was no indication of turn-around requirements and shipping, running 
to a schedule, could be handled by the
existing cranes, he said.
Industry sources have speculated several ports around the country would 
struggle to accommodate the massive ships
and could lose revenue if exporters centralised cargoes to larger ports by 
road or rail.
Mr Lindsay said Port Chalmers was already the sole South Island port for 
some shipping services, but it was too
early to speculate on Nedlloyd's port rotation and the effects on ports 
such as Timaru and Bluff.

New line for port
By Simon Hartley

Port Otago has been included in shipping line expansion for a new 
fortnightly "direct multi-purpose liner service" to
and from Japan, South Korea and northern China beginning next month.
Tasman Orient chief executive Ulrich Stelling said the development would 
improve coverage of New Zealand ports and
increase connections with a large number of Asian destinations.
"This upgrade significantly enhances the service product we are now able to 
offer," Mr Stelling said in a statement.
The company operates 11 vessels, offering three route services to north, 
east and south east Asia fortnightly, and
covering more than 16 ports from Japan to Indonesia.
In the past two years, new international services stopping at Port Chalmers 
included Maersk Line, Chief Container
Service and Malaysia International Shipping Corp-PIL. 
Last week, Wrightson Forestry Services announced Port Chalmers would be 
included in a new six-weekly log service
to Korea, which is expected to boost Port Chalmers log exports to pre-"Asian crisis" 
levels.
Mr Stelling said the Tasman Orient service would offer bulk cargo as well 
as general and refrigerated container
exports.
Container handling at Port Chalmers had increased 70% in the past three 
years and was expected to increase by up
to 7% to the end of the financial year.
Tasman Orient resulted from a merger last year between Tasman Asia and 
NZ-Orient Line. It is owned by Fletcher
Challenge, Ahrenkiel and Swire.

Legal service offered online
By Dene Mackenzie

Dunedin law firm Webb Farry sees potential to take some of the mystery 
out 
of the city's geographical location by
using the Internet to attract a new set of potential clients.
"As long as people understand this type of communication and are 
comfortable with it, they can be from anywhere
really," Webb Farry solicitor Russell Mawhinney said in an interview.
"Certainly, there are many
legal services that can be offered through our web site. We are only 
scratching the surface at this stage."
The key was linking into search engines used by potential out-of-town 
or 
international clients, he said.
But existing clients who used the technology could also receive faster 
service.
Communication could be carried out through e-mail or by connecting to 
the 
firm's web site - www.webbfarry.co.nz - to
carry out some online transactions.
The firm had offices in Dunedin, Mosgiel, Oamaru and Queenstown. Rural 
clients could deal with the firm through e-mail to save travelling 
time.
"Gone are the days of saying: 'It's not worth the paper it's written 
on.' 
It might not be written on paper," Mr Mawhinney
said.
Although most possible online transactions are forbidden by law, the 
Government has distributed a discussion paper
on the proposed Electronic Transactions Bill to be introduced to
Parliament later this year.
Mr Mawhinney believes there will be opportunities for Otago businesses 
who 
are prepared to embrace the technology.
"The whole environment for doing business is changing
rapidly and the Government has acknowledged this in the proposed Bill. 
It 
will become important for businesses not
just to understand the technology, but also to understand their legal 
rights and obligations in the new environment."
Continued on page 30

Dunedin law firm offers online service
Continued from page 29
One of the possible transactions clients could start through the web 
site 
was setting up family trusts or estates. Early
communication could be carried out through e-mail before the face-to-
face 
meeting, he said.
While Mr Mawhinney often forgets to turn on his mobile cellphone, he 
uses 
e-mail extensively.
"I got used to doing that when was overseas in Hong Kong. People 
constantly communicated that way."
Webb Farry's commercial and technology specialist, David Ehlers, said 
the 
firm had been encouraged by the number
of hits the site had already received and the business generated as a 
result.
"There are no shortcuts. You
have to promote the service but it can be done in a number of ways."
It was a case of thinking about where the clients were going to come 
from.
The firm's lawyers were all getting a crash course in dealing with 
e-commerce at a time when experience was hard to
find.
"There are legal issues surrounding e-commerce which will require 
attention from business people. Unfortunately
though, many professional advisers have no concept of how these should 
be 
dealt with. Our experience will be
invaluable," Mr Ehlers said.
Mr Mawhinney said some people adapted to new ways of doing business 
faster than others but the Webb Farry
lawyers were "well advanced" in e-commerce.
"If we are advising clients on these issues, we need to be doing it 
ourselves."

On the web ... Webb Farry's Russell Mawhinney (left) and David Ehlers 
promote online business for the Dunedin law firm.


