Stocks firm but investors await stability

Wellington.-   The New Zealand sharemarket closed truncated Easter 
trading firmer on Thursday, but with a lot of
investors sidelined waiting to see how American markets settle next week.
"The uncertainty of what's happening in the US markets - I think 
people weren't really looking at investing in the last
two days given that we're going to have a holiday," Cavill White's Peter 
Lynds said.
He said nervousness remained after global markets pulled back from the 
the brink of collapse this week.
There had been a rearrangement of value away from Internet stocks and 
toward the kind of old economy stocks preponderant in New Zealand.
ABN Amro broker Nigel Scott said People wanted volatility to die down.
"In general terms they still haven't knocked the froth out of the tech market," he said.
Despite American market weakness on Wednesday there, the NZSE-40 capital 
index by the midday Easter close was up, gaining 9.48 points to 2012.42.
Smaller stocks also gained, the NZSE-SCI capital index up 32.90 points at 
5132.50.
US stocks dropped on Wednesday as concern about a decline in revenue  at 
IBM and disappointment among some
investors over Intel Corp's earnings growth undermined confidence in the 
technology sector.
But earnings reports stole the spotlight as the corporate reporting 
season got heavier, overshadowing last week's
concerns about inflation and stock valuations.
The technology-dominated Nasdaq composite index declined 87.15 points, or 
2.30 percent, to 3706.42. The blue chip
Dow Jones industrial average dropped 92.46 points, or 0.86 percent, to 
10.674.96.
Here, turnover was worth a respectable $74.23 million as people rushed to 
complete orders in the shortened session.
Rises outnumbered falls 53 to 38 among the 138 stocks traded. Fletcher Forests stood 
out, rising 8c to 80 on conjecture of a sale sooner rather than later as the  Fletcher 
group separation process continues.
"What the market is telling you is it may not be far away," Mr Lynds said. 
Mr Scott said Telecom had come back after being hit down on Wednesday as a 
brokerage filled an order. It was up 5c at 870.  
Elsewhere, among the leaders, Air NZ domestic A shares were up 3c at 190 and the 
foreign Bs gained 6c to 241. Auckland Airport added 3c to 230.
Fletcher Building rose 7c to 200, Energy fell 5c to 485, Paper firmed 1c to 229, 
Independent News shed 6c to 374, AMP gained 5c to 1790 and Natural Gas
Holdings firmed lc to 126. 
Carter Holt added lc to 173, Contact was up 2c at 247, and Montana gained 5c
 to 178. -PA

Forest shares soar

WELLINGTON. -  Shares in Fletcher Challenge's forestry division soared on 
Thursday as investors bet the company may soon decide to sell the unit.
The shares rose 11. 1 percent to close at 80 cents each, their highest price since  
November. More than 14 million shares traded, or five times its three month daily 
average. The shares gained 21 percent since Wednesday. The rise on Thursday drew 
an inquiry from the market surveillance panel.
In reply Michael Andrews, Fletcher Group chief, said it knew of no reason for the 
movement.
While reiterating the board's commitment to dismantling the group's targeted letter 
stock structure by the end of calendar 2000, Mr Andrews said: "While considerable 
work was being progressed in Building, Energy and Forests, there was nothing 
imminent to be announced in relation to any of these shares. We undertake to keep 
shareholders informed of progress."
Ian Waddell, a broker with Ord Minnett Securities, said: "The market is 
telling you a deal may be close" on the sale
of the forestry assets. -BIoomberg.

Sealord share likely to go overseas

WELLINGTON.-  Brierley
Investments' half-share in Sealord, this country's biggest fisheries 
company, looks likely to be sold to an overseas
bidder despite lobbying and legal action to stop it.
Sources say Te Ika Paewai, the intermediary overseeing the share sale, is 
likely to sell the share to either a South
African or a Japanese consortium, The Dominion reported.
Treaty Tribes Coalition chairman Harry Mikaere, who was seeking to join a 
bid for the share, has expressed concern
that an "uneven playing field" with regard to the compliance costs regime 
made it easier for overseas companies to
bid higher.
Alleging, that the Treaty of Waitangi Fisheries Commission, which owns 
the other half of Sealord, was soliciting
overseas bids, Mr Mikaere met associate Maori Affairs minister Parekura 
Horomia this month to discuss his
concerns.
Overseas Investment Commission chief executive Stephen Dawe said there 
would probably be ministerial input into
the commission's decision as to whether overseas companies could own the 
half-share in Sealord.
Finance Minister Michael Cullen is seeking advice on why authority to 
make the fisheries quota decisions was
delegated to the commission in November, just before the election.

Sanity seeps back to tech-bashed stock markets
By Tracey Lowndes and Adrian Holland

The jury was still out late this week on the implications of the US 
sharemarket's steep losses, but one local
heavyweight player was urging investors maintain perspective
AMP Asset Management, whose New Zealand office manages $1.5 billion of 
global equities on behalf of customers,
even went so far as to present journalists with a 200-year chart of 
equity markets.
Last Friday's US slump, with the Dow Jones industrial average falling 5.7 
percent and the tech-laden Nasdaq
composite sliding 9.7 percent, was barely a blip on the graph which 
showed equities have steadily gained in value
over the past two centuries.
But that's cold comfort to investors shocked by the sharp losses and 
forecasts of continuing volatility.
The catalyst for the US dive was worse-than-expected inflation figures, 
with markets worried the US central bank will
put a heavier foot on the economic brakes.
Economic uncertainty combined with overinflated share prices and nervous, 
debt-laden investors makes for a
potentially explosive mix.
Nervous trading is likely to be exaggerated by the disruption of the 
Easter holiday, with some markets open and
others closed.
In the world's first trading session after the US slide, New Zealand's 
NZSE-40 capital index fell 4.69 percent, diving
below 2000 for the first time in a month.
Once the influential US market opened last Monday with signs of a 
fight-back, markets began to recover albeit
without much conviction.
The NZSE-40 ended Thursday's abbreviated session up 9.48 points at 
2012.42 - 59 points off last Friday's finish.
With the local market closed until Wednesday but Wall Street only shut 
for Good Friday, investors have to sit out
three US sessions before they can react.
The wait may give them the perspective that AMP is urging, with head of 
investment strategy Paul Dyer this week
arguing the US correction was nothing out of the ordinary and no reason 
to panic.
But nevertheless AMP said the party was over for "new economy" stocks.
Instead, it was time for investors to stop following the leader and 
over-inflating technology stocks and get back to
good old-fashioned number-crunching.
"It's pretty clear that technology stocks around the world have been at 
heavily-inflated levels, what you can
reasonably call a bubble, for some time and that's burst, that's 
abundantly clear," Mr Dyer said.
In America, popular search engine AltaVista this week postponed its share 
float and brokers see more problems
ahead if cash-strapped dot-coms can't find investors.
The upheaval has already claimed two local victims, with on-line retailer 
Estaronline postponing its share float and
Force Corporation shareholders delaying a merger with internet provider 
Ihug.
But Internet investor Eventures is pressing ahead with its $30 million 
share float.
World technology stocks have fallen sharply since early April when a US 
judge ruled Microsoft, the second most
heavily weighted stock on the Nasdaq had breached antitrust laws.
Microsoft's stock immediately plunged 10 percent, wiping $US72 ($NZ146) 
billion off the company's value in just one
day, and taking the rest of the Nasdaq with it.
But lending weight to Mr Dyer's claim last Friday's slide was "part and 
parcel of normal life, in the equities markets" was the couple of false starts in March.
The first jolt came when data showing Japan's economy technically in recession 
sparked a technology sell-of on 
the Tokyo exchange which spread to the
US.
The market fought back only to dive again
two weeks later when respected US investment analyst Abby Joseph Cohen 
suggested it was time to take money out of equities.
Then came Microsoft.
But Mr Dyer said the US picture was so ugly it was obvious that something 
was going to give, with Microsoft just a
catalyst. AMP reduced its equities weighting at the start of April and 
now wished it had acted earlier.
With institutions following Ms Cohen's lead and backing off equities, 
the US market was dominated by retail
investors targeting an ever-diminishing number of tech stocks, often with 
borrowed money.
It is still too early to tell what would happen to markets, especially 
with the factors that sparked the slide - over-inflated prices and a lack of liquidity 
until institutions return - still around.
Current values should flush out long-term investors, which is where New 
Zealand's fundamentally sound "old
economy" stocks might find favour, but offsetting that will be investors 
forced to sell to meet short-term cashflow problems or just keen to cut their losses and 
run.
"At the end of the day, where sharemarkets are going to go is going to 
depends on the underlying earnings and
cashflows of the companies," Mr Dyer said.
Indeed, the Nasdaq posted its highest points gain ever overnight Tuesday 
after strong profit results served as a
reminder Wall Street hosts some of the world's best earners.
Major  companies reporting this week included Coca-Cola Company, America 
Online, Intel, IBM, Kodak and Eli Lilly.
Local company Eventures, the sort of tech company burnt investors will view 
warily, uses this traditional argument of
fundamental value in promoting its public float in early May.
It refers to identifiable e-commerce value as well as potential and wants 
to see existing revenue streams in possible
investments.
But it doesn't flinch from pointing out hazards to shareholders.
"Investing in shares in Eventures should be regarded as high risk," its 
prospectus says, typed in bold just in case
anyone didn't get the message this week.
The company also believes its stock is priced at a realistic level - 60 cents a share.
"That will give us one of the lowest price to net tangible asset ratios 
within the e-commerce technology sector in New
Zealand, even after (Monday's) drop," said chief executive Cindy Mitchener.
Eventures also has impressive backing, boasting Japanese internet investor 
Softbank and News Corp's Epartners as
cornerstone shareholders.
It has strong links with management from leading old economy companies. 
Telecom, The Warehouse and Todd
Capital have invested, taking 2 percent stakes at a cost of $3 million each.
Eventures notes that its success does not depend on the direction of 
stockmarkets but on the Internet which, after
the fallout, will still be there.
Others agree, with Linda Ray, a portfolio manager for the US's Northstar 
Group, posting "buy" orders on tech stocks
including Microsoft, and Novell.
"We feel its impossible to have a successful portfolio for the next five to 
10 years, without exposure to this sector of
the market," she said this week.
And Brian Wesbury, author of an investor guide on the "Five Economic Trends 
Shaping the Future", was equally
unfazed.
"The real point is that this is not just a bunch of New Era hype," he said in a report 
published, fittingly, on the Financial Times' FT.com web site.
"Something real is going on - technology is creating wealth at the fastest pace we 
have seen since the Industrial Revolution. The key to all of this is productivity, which 
is the oldest idea in economics, going back to Adam Smith and his pin factory."
In New Zealand, if companies like Eventures stick to a fundamentals-based approach 
they may herald a new generation of tech companies - a part of, rather than distinct 
from, the general investment community's disciplines. – PA

With the local market closed until Wednesday but Wall Street only shut for Good 
Friday, investors have to sit out three US sessions before they can react.

More orders

Christchurch-based boat manufacturer Raeline has been awarded a second contract to 
produce boats for major US pleasureboat maker Sea Ray. Raeline, formed in mid-
1999, began production of the 180 Bowrider for Sea Ray, the first time the US group 
had used an independent offshore boatbuilder, Raeline director Ian Williamson said. 
Production of the second model is expected to start in July with he first boat due off 
the production line in August. - PA

Vodafone popular

Vodafone New Zealand expanded its customer base 160 percent in the year to
March, from 290,000 to 473,000.
Managing director John Rohan said the significant growth was a result of the general 
increase in mobile penetration rates, the expansion and effectiveness of Vodafone's 
distribution network and its marketing efforts. – PA

Interest in Brierley holding

WELLINGTON - Waitangi Fisheries Commission is preparing to directly bid 
for Brierley's half-share in New Zealand's
biggest fishing company, Sealord, which may take the commission's total 
share to more than 75 percent.
Commissioner Whaimutu Dewes said the previous sale process had 
effectively been terminated with the
Government's rejection of overseas bids for the share, meaning the 
commission's pre-emptive
right over the share was also gone.
The commission already owns the other half of Sealord, a result of the 
Government's 1992 Maori fisheries settlement,
and would not regard buying the remainder as a financially prudent 
investment.
Brierley Investments' half-share is valued at $160 million to $200 million, and the 
commission would buy it only in collaboration with another partner - PA.

Deficit shows all is not well

By Simon Louisson

The strongest message delivered to Finance Minister Michael Cullen on his 
maiden budget came from Thursday's dire balance of payments figures.
These showed the March year deficit of what New Zealand earns and spends 
in the world was $8.52 billion - 8.2
percent of our annual gross domestic product, and the worse shortfall among 
rich nations.
The figure was bloated by the $631 million cost of the frigate, HMNZS Te 
Mana, but even without that is
unsustainable.
Furthermore, foreign debt figures on Thursday showed our total debt grew 
6.5 percent in the March year to $109
billion - that's $28,700 for every man, woman and child.
After 15 years of economic reform, something fairly radical is wrong.
Firstly, our exports are not strong enough and, secondly, we are not saving 
enough.
Dr Cullen put a positive spin on the numbers by saying one reason for the 
deficit worsening was that foreign
companies were increasing profits here and sending the returns home.
But he recognised the reason behind the investment income deficit is 
insufficient savings from New Zealanders to fund
development. So foreign investors buy our companies and Belgium dentists 
and the like lend us cash.
To solve the problem, Dr Cullen could have maintained the status quo - 
government sets the economic environment
then steps back to let business do its thing. Or, as he decided, he could 
change course.
Barry Coleman, publisher of the National Business Review, who hosts one the 
country's biggest business gatherings -
the post-budget breakfast in five metropolitan centres - noted the wheel 
had come full circle in the nine years NBR
had been involved in the function.
The first was Ruth Richardson's "mother of all budgets" where business was 
told it had to stand on its own feet,
whereas Dr Cullen had definitely put government hands back on the tiller.
Like his predecessors, Dr Cullen has attempted to paint his budget as 
taking the longer-term view.
"A country with a large balance of payments deficit does need to lift the 
national savings rate, and the only short-term way a government can do that is to 
increase its own savings," he said.
He has promised surpluses slightly better than the former National 
government's projections and has tried
to portray himself as the "Iron Chancellor" due to the budget's fiscal 
conservatism. This is to nullify attacks that it is a "tax and spend" government.
Although there is $1.23 billion of new spending in the 2000/01 year, and 
$5.9 billion over this term of government, Dr
Cullen notes that spending as a proportion of GDP will actually drop 
fractionally from the current year. He has also
attempted to grasp the nasty nettle of superannuation which he hopes will satisfy a 
two-fold purpose of boosting national savings and provide sufficient to pay pensions 
for the baby boomers in their old age.
Details were sketchy as Labour has yet to get the agreement of its partner, 
the Alliance. Basically, $3.6 billion will be
set aside in the three years from 2001, and then $2 billion a year until 
2025, to build the fund from which pensions will
be paid.
Crities argue this is not new saving as the moneyfrom surpluses would have been used 
otherwise to repay debt or give tax cuts. Some see it as preferable to tax cuts,
which puts cash in people's hands and it is spent on new cars and overseas 
trips exacerbating the balance of payments problem.
The problem with building a massive super fund is managing it. History is 
not on the side of governments here.
Apart from new social spending, which Dr Cullen has characterised as 
"closing the gaps" and delivering on election
promises, the other big thrust was toward the "knowledge economy".
Education gets $300 million more, and if there is one thing that 
characterises the knowledge economy standouts of
Ireland, Israel and Finland, it is their commitment to education.
The Government is to spend $386m extra over the next four years to promote 
regional growth and foster new
technology.
An extra $43m has been allocated for research, science and technology in 
2000/01, bringing total public investment
to $474m and including $20.8m to partner private sector research and 
development.
The Government has opted for grants rather than tax breaks, with Research 
Science and Technology Minister Pete
Hodgson arguing grants are more help for start-up firms. Big business 
prefers tax breaks, which they get more from.
Business on budget night greeted Dr Cullen's budget with predictable 
condemnation. Typical were the comments of
the Business Roundtable chairman Ralph Norris, who said there was nothing 
to act as a circuitbreaker.
"The picture of the economic future it points to for the country is 
unexciting and risky at a time when much of the rest of the world is performing 
strongly," he said.
However, Treasury is predicting economic growth
3.1 percent from 2000 to 2005.
That is the maximum the Reserve Bank estimates is sustainable.
The audience at Friday's business breakfast was in a more receptive mood 
and gave Dr Cullen a warmer reception
than the acrimonious welcome he got from Christchurch business in his final 
pre-budget speech.
It was interesting to note that there was only one question on the 
Employment Relations Bill and one on the fear of
increased industrial activity.
The bulk of questions related to issues such as money for education, 
universities, apprenticeships, why R&D wasn't
made tax deductible, the People's Bank and how to stop the young from 
deserting the country.
Roy Weaver, chief executive of the Port of Timaru, commented to Dr Cullen 
that the New Zealand dollar in the 1970s
was worth more than the US dollar and asked how he planned to arrest its 
depreciation.
One answer, said Dr Cullen, was to produce fiscal surpluses to lift national saving. 
"But at the end of the day, our long-term prospect in terms of the dollar improving in 
value will be a consequence of the extent to which we lift our productivity growth rate 
above that of our major trading partners.
"That will be the major underlying driver of value in that respect, and 
that will in large part also be related to how we
diversify out of a commodity-dependent economy which would have enormous 
impacts in my view in terms of the
stability of New Zealand's economy over time."
Delivering surpluses is the easy bit.
Moves toward the knowledge economy will help develop non-commodity exports 
and jobs but may take a generation
or two to change.
And business argues many of the government's policy initiatives, 
particularly the ERB, will actually harm productivity
growth.
Dr Cullen complained that business expectations were so great it was an 
impossible hurdle for the budget to leap.
While the money simply wasn't there, there were titbits for business.
"It's more like fiscal finger-food - enough to whet and curb an appetite, 
but not to sate a roaring hunger," he said.
Whether it is enough to cure the chronic balance of payments problem is 
another question.-PA

Wise teachings from founding father

By Mary Holm
Probably the best teacher I've ever learned from died earlier this month 
aged 77. His name was Merton Miller and he
taught finance at the University of Chicago.
Mert enjoyed life. Halfway through his evening classes, he had an assistant 
bring in a cold can of his favourite beer.
Every year he bought a season ticket to watch his beloved Chicago Bears 
play football.
His sense of humour was part of the secret to his teaching success. But he 
also knew his subject inside out. After
all, a fair bit of the key research was his. On the strength of it, he won 
the Nobel Prize for economics in 1990.
"Merton Miller is widely considered to be the founder of modern finance," 
said Chicago business school dean Robert
Hamada when Miller died.
 But he wasn't only a theorist. "He was a strong supporter of the belief 
that theories are only good if they conform to
the real world data," said Hamada.
Miller didn't just look at what happened beyond the ivory towers, he got 
heavily involved. After the 1987 sharemarket
crash, for instance, he served on the committee that looked into charges 
that programme trading caused the crash.
When he visited New Zealand in 1991, he was the guest not only of the 
University of Auckland but also the Futures
and Options Exchange.
While much of Miller's research is quite complex, at least one of his 
major findings is simple. Understanding it is
helpful to any investor.
In a nutshell, Miller and colleague Franco Modigliani said that, "Dividends 
don't matter."
It doesn't make any difference to a shareholder whether a company pays out 
its profits in dividends or uses the
money to help the company grow, they said. If the company keeps the money, 
that raises the value of its shares.
Shareholders who want their money now
but receive no dividend, or too small a dividend, can simply sell a few of 
their higher valued shares.
Miller was the first to acknowledge that, in the real world, this theory 
gets muddied by such issues as taxes,
brokerage charges and other transaction costs, and the fact that not 
everybody has the same information.
Still, the idea that there is a tradeoff between dividends and share price 
growth has many applications.
In New Zealand and Australia, for instance, companies tend to pay higher 
dividends than elsewhere. On the other
hand, share prices here don't tend to rise quite as fast as has been 
particularly obvious in recent years.
This situation can be confusing to investors who like to live off their 
dividends and maintain their capital.
Let's say you're one of them. Responding to suggestions that you diversify 
offshore, you've moved some money out of
New Zealand shares and into a fund holding overseas shares. Your dividend 
income falls, and you are unhappy.
That unhappiness makes little sense, though. The value of your 
international share fund investment may well have
doubled in the last few years. You should be gleeful.
To reap the benefit, you must relax your rules and sell a few shares to 
boost your dividend income.
If you still want to maintain your capital, look at the dollar value of 
your investment a year ago, and be sure you hold
your total investment at that level or higher.
Owning 10,000 units worth $12 each is exactly the same as owning 12,000 
units worth $10 each.
It's the sort of approach Mert Miller would have approved of.
Mary Holm is a freelance journalist, commissioned by the New Zealand 
Stock Exchange to write an independent
personal investment column. She can be reached by e-mail at 
maryh@journalist.com or by mail care of this
newspaper. Sorry, but she cannot respond directly to readers.

The Warehouse moves into PC market

 AUCKLAND.- A shake-up in the personal computer market looks likely, with 
retail  juggernaut The Warehouse making its third attempt to break into PC sales.
A deal with United States-based PC manufacturer Gateway will see computers 
appear alongside crayons and paper
clips at Warehouse Stationery stores throughout New Zealand from today.
The retail giant's pitch at the $1 billion PC market also includes a deal 
with local assembler Arche Techologies, which
will allow customers to trade in old
components for new ones.
The deal will effectively increase the number of Gateway outlets in New 
Zealand from five to 28, with another seven
Warehouse Stationery stores expected to open by the end of this year.
 Warehouse managing director Stephen Tindall, fresh from attending Bill Gates'
CEO Summit in Seattle, described the move as an "enormous opportunity" for the
bargain basement retailer.
The move will see the chain compete directly with rivals such as Harvey Norman,
Noel Leeming and Computer City. 
With the most basic model selling for $1699, The Warehouse expects the move 
will up the ante with its competitors.
Unlike, most of its rivals, however, it will not offer a cash-and-carry service - an
attractive deal for the chain as it means it will not need to hold any stock.
In what has become known as the "clicks-and-mortar" model of retailing, all 
PCs will be ordered over the internet and delivered from Malaysia five to 10 days 
later. – PA

Business launched

A new information technology services business – backed by a group of corporate 
high-flyers – has been launched. Infinity Group has been formed from the acquisition 
of a number of established information technology businesses, including Trilogy 
Group, Madison Group and Quanta Systems, a Wellington report said yesterday. 
Infinity is 56 percent owned by Active Equities, which was founded by three former 
Brierley Investments' executives – Bruce Hancox, Paul Collins and Patsy Reddy. The 
remaining stake is held by the directors, employees and former shareholders of 
Trilogy, Madison and Quanta. Trilogy was bought by its own management in 1993, 
from then-owners Brierley Investments.

Bank should hold rates despite price rises: economists

WELLINGTON.- Economists think the Reserve Bank should overlook price 
increases in petrol and tobacco and hold
interest rates, but there are doubts whether the bank will listen to such 
advice.
Statistics New Zealand yesterday said consumer prices rose 0.7 percent in 
the June quarter, taking the annual
inflation rate to 2.0 percent for the June year.
The quarterly rise was driven by significant increases in the prices of a 
limited range of items - cigarettes, tobacco,
petrol and international   air fares, SNZ said.
These were partially offset by a significant fall in used car prices.
The CPI number is a key determinant on whether the RB lifts the official 
cash rate - the benchmark for interest rates -
yet again at its next monetary policy review on August 16.
The New Zealand Institute of Economic Research's Quarterly Survey of 
Business Opinion showing the biggest drop in
confidence in 16 years may be influential in the RB's decision.
A net 42 percent of firms said they expected the general business 
situation to worsen over the next six months,
compared with a net 6 percent expecting an improvement in the previous 
survey.
Bancorp Merchant Bankers said the Government was to blame for the CPI 
increase.
"While the CPI is likely to exceed the (Reserve) bank's target range (0-3 
percent), it is due to government
interventions and external influences, and so the Reserve Bank can be let 
off the hook," Bancorp said.
"The need to raise rates against the thrust of latent inflationary 
pressures is under a cloud
though, with the slower June quarter activity likely to be only a slump in 
the economy's transition from growth by
wealth consumption to growth by generating wealth.
"Therefore the ability for the Reserve Bank to raise interest rates in this 
environment is pretty tough, and if tomorrow's
NZIER Business Opinion is as poor as expected, the Reserve Bank will be 
fully justified in not moving interest rates
at the August monetary policy statement."
Hongkong and Shanghai Banking Corporation senior economist Grant Fitzner 
agreed the RB should hold rates but
was not confident the RB accepted comments it should "look through" 
discretionary or offshore-based price
increases.
"We doubt that New Zealand has reached the end of its tightening cycle just 
yet. Bank concerns over upside risks to
its inflation outlook are the reason," Mr Fitzner said.
"Although the domestic slowdown should ease short-term capacity 
constraints, the bank will be concerned that rising
import prices from a weaker than expected currency may flow through to 
retail prices, and that higher petrol and
producer prices will also feed through into the rest of the economy."
However, NZIER, which still expects a fairly robust track for economic 
growth, believes the RB should hike rates
again as it expects sharp prices in the pipeline.
"It's really the worst of both worlds," said NZIER senior economist Matthew 
Hassan.
The RB had to assess whether this quarter's result was "some strange 
aberration that is going to be offset in further
quarters, or whether that's a distinct sign of weaker demand in the medium 
term." PA

Forestry export boom on way, port company says

WELLINGTON Wellington port company Centreport is expecting a boom in 
forestry exports over the next six years.
The port is on track to ship 400,000 tonnes of timber products to Australia 
and Asia this year, but would easily
surpass the one million mark by 2006, Centreport spokesman Stuart Scott 
said.
Log exports alone had recovered from 76,000 tonnes in 1997-1998, at the 
peak of the Asian financial crisis, to now be
about 140,000 tonnes.
The forestry boost would also be driven by double the amount of processing 
at central North Island mills between now
and 2010, Mr Scott said.
Centreport ships a range of timber including logs, fibrewood for the 
furniture industry, pulp and various other sawn
timbers.
Meat, dairy and fish products from Wellington businesses and further afield 
are other revenue earners for the port, as
is used cars from Japan.
Business confidence may be on the wane
around the country, but Centreport chief executive Ken Harris was 
optimistic about the local economy.
International shipping firm Mediterranean Shipping Co had indicated it 
would be stopping in Wellington regularly and
this gave the port another route to ship cargo to South Africa and other 
international hubs, Mr Harris said.
The port was on target, for a "good year" in terms of profitability, but Mr 
Harris declined to elaborate.
Centreport is due to release its annual result for the June year next month.
Centreport was winning market share off its rivals and with larger ships 
visiting ports in the future, it was well placed
to handle large cargoes, he said.
While larger vessels would present some ports with a problem in terms of 
their infrastructure and harbour depth, Mr
Harris said Centreport had upgraded one of its cranes and Wellington 
Harbour was deep- PA

Gas found on Hawke's Bay farm

HASTINGS Indications of high-quality  natural gas have been found on a 
central  Hawke's Bay farm.
 Indo-Pacific and Origin  Energy said
 natural gas signs had been
found in their Speedy-1  well on a farm near Waipukurau.
 However they said it was too early to draw
 conclusions as to the commercial
viability of the well which is 10km from the Hawke's Bay natural  gas pipeline.
Nearly three years ago Westech Energy
made a commercial sized gas discovered at Kauhauroa,
 near Wairoa in northern Hawke's Bay.
Indo-Pacific spokeswoman Jenni Lean said the high-quality hydrocarbon gases, 
normally associated with the presence of oil, were encountered at a depth of 870m, 
130m short of the target drilling depth of 1000m. However drilling on the site had 
stopped after the drill rig became wedged in the well at a depth of 600m and could not 
be extracted.
Ms Lean said the partners planned to continue drilling by side tracking - 
a deviation from the original well - from 450m.
It is the third well that Indo-Pacific and Origin Energy has drilled in 
Hawke's Bay.
Westech Energy will soon begin drilling wells on its Awatere and 
Kauhauroa gas fields.
It had already drilled 10 wells in the Wairoa district since the 
commercial-sized Kauhauroa discovery, the gas
reserves of which have been estimated as being hundreds of billions of 
cubic metres.
The Awatere gas field was assessed as having reserves of tens of billions of cubic 
metres.
Westech is considering building an up to 50 megawatt gas-fired power station at 
Wairoa and 120km pipeline to Hawke's Bay to use the gas.- PA

Manufacturers' confidence has further decline

WELLINGTON.- Manufacturers' business expectations have continued to decline 
for a fifth quarter despite good
trading in the March quarter, the Manufacturers' Federation said yesterday.
"While not totally unexpected given business concern over the possible 
outcomes of some government policies, a
decline of 45 percent has been exacerbated by rising input costs and an 
inability to pass on prices increases,
particularly in domestic and Australian markets," Federation president 
David Moloney said.
The weakness of the kiwi dollar and rising oil prices were the main 
contributors to cost increases which had not been
fully felt in the March quarter.
'The principal indicators for the sector over the next three months are all 
negative with investment intentions down,
along with employment
prospects and, for the first time since December 1998, profit 
expectations," Mr Molloy said.
Domestic activity, which accounts for two thirds of all manufacturing 
sales, was down in the June quarter, with a net
12 percent of manufacturers expecting domestic sales to fall in the 
September quarter. Export growth was expected
to continue given the weak currency but would not be enough to offset the 
fall in domestic sales.
If things continue along the present path there is a possibility of the 
sector moving into a recession later this year," Mr
Molloy said.
"Some of the factors contributing to the present situation are clearly 
beyond our control, such as the strength of the
US dollar. But further interest rate increases, or policies which increase 
employment and other costs of doing
business are not helpful. "- PA

$10.5 million gain for staff

WELLINGTON - About 60 New Zealand staff of Sydney headquartered broking 
and investment house Ord Minnett will
between them reap more than $10.5 million from a takeover offer by 
American banking giant Chase Manhattan.
 A select few senior staff will also receive an undisclosed share of special incentive
payments to entice them to stay on.
The  takeover, unveiled last week, is set to be finalised by early next month. It is 
likely to bring a new name for Ord Minnett, which moved into New Zealand in 1988 
through an initial half-share in Wellington brokerage O'Connor Grieve. It took full
control two years later.
Chase Manhattan has offered $A94 million ($NZ121.7 million) in cash for the 54 
percent of Ord Minnett owned by Ord's staff, plus $A32 million in the targeted
incentive payments. The bid values the entire group at $A200 million. - AAP

Fletcher Energy rallies on expectations

WELLINGTON.- Fletcher Energy steamed ahead on the sharemarket yesterday, with 
investors fuelled by
expectations the Fletcher letter stock structure will be dismantled and  
Energy will be spun off as a separate unit,
where its value  will be fully recognised.
The stock hit highs of 775 to close up 27c at 764 on trade of 1.4 million 
shares worth $11 million. Energy has gained
59 percent since the end of March.
Yesterday's rally was on the back of continued good news for Energy, 
Salomon Smith Barney dealer Belinda Stanley said.
The rest of the market could not keep upp - the NZSE-40 Capital Index 
closed down 3.85 points (0.18 percent) at 2115.93.
 Turnover was a light $79.6 million, with rises outnumbering falls 52 to 50 
among the 154 stocks traded.
The consumer price index data out yesterday
morning showed consumer prices rose 0.7 percent in   the June quarter, 
taking the annual inflation rate to 2.0 percent
for the June year.
The data, which was in line with economists' expectations, had little 
impact on the market Mrs Stanley said. The
sharemarket was dragged down yesterday by falls in the major stocks - 
giant Telecom was down 3c to 745 on light
trade of 2.1 million shares worth $17.6 million.
However, there seemed to be support for Telecom around the current price 
levels, Mrs. Stanley said.
Number two stock Carter Holt Harvey was off 5c at 187 and Lion Nathan 
weakened 7c to 488.
The other Fletcher stocks made smaller moves than Energy, Building up 2c 
to 242, Forests down 2c to 86 and Paper 1c softer at 247.
Elsewhere on the market, Brierley Investments attracted more interest. 
than usual yesterday, closing 3c
higher   at 37 on   moderate turnover  of 4.5 million shares. Sky City also 
rallied, gaining 12c to 700 Infratil was up 2c at 127, and Ports of Auckland climbed 
5c to 440.
On the downside, Tranz Rail and Auckland Airport
both fell 2c to close at 393 and 265, respectively, while
Baycorp  fell 9c to 1181 and the Warehouse lost 1c to
close at 560.
On Wall St, technologies clicked into rally mode on
a view that June's surprising drop in the United States
core producer-price index - that excludes volatile food
and energy prices - could take pressure off the Fed to continue to fight inflation.
The tech-rich Nasdaq composite Index rose 71.32
points - or 1.71 percent - to 4246.18, after some of its
tech heavyweights came back with a vengeance.
The close was the highest since April 7 at 4446.45 and it gained almost 5.5 percent for 
the week and picked up 4.3 percent for the year. - PA

Powerco set to be major player

By Ada Hill

Powerco shareholders concentrate on the company's future.

Powerco is on line to be one of the top five energy network companies in 
New Zealand.
Shareholders voted overwhelmingly yesterday for the company to merge with 
CentralPower, Palmerston North's
network company.
The new company will be the fourth largest energy network company in
terms of revenue and asset value and the second largest electricity distribution 
company in terms of the length of  its network.
The company will stretch from Taranaki through Wanganui, Rangitikei, 
Manawatu, Tararua and into Wairarapa.
Special meetings were held in Palmerston North and Wanganui for the 
respective companies
to vote on the merger.
CentralPower shareholders passed their resolution with 99.475 percent of 
voters giving their approval and in Wanganui
99.72 percent of those who voted approved the merger.
The Wanganui meeting attracted 210 people more than the 120 that had been 
anticipated.
The meeting was subdued although the vote was greeted with cheers and 
applause.
Chairman Barry Upson said at the CentralPower meeting seating for 170 had 
been allowed but a lot were empty.
One of the few questions asked was how many staff would be made redundant 
as a result of the merger.
Mr Upson said he did not know as the issue still had to be worked 
through, which would happen
during the next few weeks.
After the meeting Mr Upson said the merger would make the company one of 
the major players in the industry.
"It means we will be an industry player that will hopefully get 
recognition from Government and that its (the company's) scale and size will attract 
business."
The types of new business could include managing other smaller network 
companies and doing contract work for other
companies.
Mr Upson has been appointed chairman of directors of the new company.
The new company will be known as Powerco and will begin operating on 
September 1.
Mr Upson said he hoped it would be listed on the New Zealand Stock 
Exchange before Christmas.

Market falls on back of double Telecom blow

WELLINGTON - Telecom dragged the New Zealand sharemarket leaders' index 2 
percent lower yesterday after the company announced drops in earnings and dividends 
and a mop-up of its Australian subsidiary AAPT.
Telecom shed 35c to 720, with more than 4 million of the market heavyweight's stock 
changing hands.
The NSZE-10 Index lost 22.86 points or 2.2 percent to 1004.64, but the 
movement was not so pronounced on the benchmark NZSE-40 index which fell 25.12 
points or 1.2 percent to 2145.50.
The news that Telecom was halving its dividend next year was seen as the most 
deflating influence on its share price, as the stock's high yield and company's policy of 
paying nearly all its profits out in dividends has been a key attraction for investors.
"The company's just going through that phase of moving away from being a relatively 
high yielding (stock) to being more growth orientated," Cavill White Securities' Alan 
Wills said.
"That's got to be positive in the longer term but short term the company's going 
through this little period of uncertainty."
He said investors would have to adjust their aspirations from short-term returns to 
longer term capital gains.
He did not expect a substantial change in the company's share register, noting 
offshore institutions had been looking for Telecom to invest more heavily in growing 
its business.
Tower Asset Management New Zealand equities analyst Paul Robertshawe said the 
market knew Telecom was reviewing its dividend policy and when it's 100 percent 
there's only one way to go".
"Some will he surprised it's been cut to 50 percent - a lot of people 
were expecting it to be reduced to 70 percent as
an interim message," Mr Robertshawe said.
Mr Wills said net earnings of $783 million for the June year, coming in 
at the lower end of analysts' expectations, was
also bruising Telecom's share price.
Telecom's purchase of the 20 percent of AAPT it doesn't already own will 
cost about $A444 million ($NZ577.7 million)
 to be funded by extra borrowing, which Telecom chief executive Theresa 
Gattung said could he accommodated on
the group balance sheet.
Overall rises outnumbered falls by 68 to 38 among the 152 stocks traded 
on turnover worth $83.21 million, of which Telecom accounted for $29.07 million.
Auckland International gained 9c to 302 on turnover of 1.8 million 
shares, amid expectations of increases in landing charges, a global re-rating of airport 
companies and growth in tourist numbers.
While Fletcher Energy edged up 2c to 777, Fletcher Building shed 5c to 222 and 
Fletcher Paper eased 2c to 83 with 2 million shares traded.
Other leaders to lose ground included Carter Holt lc to 186, Independent 
Newspapers 15c to 415 and Lion Nathan 5c to 480.
Elsewhere Montana gained 8c to 239. - PA

City entrepreneur's brainchild a winner

Business briefs with Ada Hill

A former Wanganui man's entreprenurial skills has won him two prizes in the Great 
New Zealand Business Venture.
Glenn Thorley, who now lives in Waikato, was one of 20 winners in phase 
one of the competition and one of 10 in
phase two with a diagnostic machine for reading information stored in car 
computers.
The competition attracted more than 1400 entries which were whittled 
down to 274 for phase two.
All entries now go on to compete for phase three which has an overall 
prize of $80,000 with three runners-up each
receiving $40,000.
The final phase closes on September 5.
Mr Thorley began designing the AutoScanner three years ago and in the 
past 18 months it has been distributed by Te
Awamutu-based company Rennacs Ltd.
New chapter
Independent book and stationery sellers, including Wanganui's Avenue65 
and Aramoho Paperworld, Marton's
Hayman's Paper Plus, Taihape's The Bookshop and Ohakune's Broadbent 
Bookshop, have joined forces.
The group, made up of members who own and operate Paper Plus, Topline and 
Paper World stores, has merged.
Paper Plus chief executive Garry Donoghue said the merge would deliver 
three key benefits for customers and
suppliers.
"Economies of scale and operational efficiencies mean customers can 
expect better prices and choice while
importers, manufacturers, wholesalers and service providers will have 
access to an almost unparalleled retail
distribution network," he said.
The group comprises 86 Paper Plus stores, 40 Topline stores and 45 Paper 
World stores.
Mr Donoghue said initially the stores would trade with the three existing 
brands but that would eventually reduce to
two with Paper Plus incorporating the larger volume stores and the second 
brand catering for other identified
catchments.
Solo counsellor
Wanganui counsellor Marie Skidmore has gone into business on her own.
She is operating from 66 Ingestre St under her own name.
A counsellor for about 10 years before going out on her own, she was a 
joint co-ordinator for Wanganui Family
Counselling Services.
 She said she wanted to go back to the
 grassroots of helping people rather than being
 involved in
 administration.
Ms  Skidmore
 provides counselling
 for adults, couples and
 children as well as
 supervision for other
 professionals who are in counselling, social
work, teaching or community work.
You've got nail
A hobby has been turned into a job for Elaine Moles, of Wanganui.
Mrs Moles has established Dezina Nails, a business that comprises 
decorating finger nails, hand massages and
manicures.
She will decorate a person's own nails or false nails.
She said she had always been interested in nails and had done decorating as 
a hobby while she worked at the city's
K mart.
With K mart's closure she has decided to extend her hobby into a business.
She will visit client's homes or they can visit her in her home.
Post comes through
New Zealand Post spent $3.7 million in the Wanganui region through its 
local operations during the 12 months to
March 31, Wanganui Mail Service Centre acting leader Chris Dunn said.
The company delivers to 19,700 address in the city. It has 52 posting 
boxes, three Post Shops, three Post Centres
also in the city as well as a number of stamp retailers which offer its 
products and services.

Brierley buy
Finance group Guinness Peat, controlled by New Zealand entrepreneur Ron 
Brierley, has bought  a 12.17 Percent stake in UK car dealer Perry. - PA
Plus 20
Postie Plus is expanding its Westport warehouse operation which feeds its nationwide 
retail and mail order clothing business. The company said it would employ about 20 
extra people in the West Coast town, adding to the 147 it already employs. - PA

Dry ewes in hot demand at lively Fordell sale

Late entries boosted the yarding at yesterday's Fordell stock sale where the market 
was buoyant for all types of sheep.
Included in the fat pens were up to 2000 dry ewes which had very strong sales.
Heavy woolly ewes sold between $48.50 and $52.50,  while prime sheep 
fetched from $42 to $47. Lighter ewes brought up to $38. The better two-tooth ewes 
sold in the $44 to $48.50 range, with light sheep selling up to $40. Heavy lambs sold 
from $79 to $83, while lighter sorts made up to $71.
The store sheep sale had better shorn male hoggets selling at $87 and $72.50, while 
late-shorn sheep brought between $60 and $66.
Heavy woolly male hoggets sold from $75 to $82, with medium lines fetching 
between $66 and $73.
A pen of woolly ewe hoggets realised $70, while the balance which were 
small sheep, brought up to $65. Late-shorn ewe hoggets made $69 and smaller sheep 
up to $58. The market for the very small and cully hoggets was particularly strong 
with little selling under $55.

Back in the black

WELLINGTON - Agribusiness company Dairy Brands New Zealand yesterday 
posted 
an operating profit of $86,000 for
the May year, following successive years of losses. "The turnaround in the 
company's fortunes is the result of a
increase in production up 8 percent: a 10 percent improvement in dairy 
payout proceeds and a tighter control over
administrative overheads," Dairy Brands chairman Peter Jensen said. The 
company's 14 dairy farm properties in
Canterbury and North Otago this year produced a total of 2.8 million kgs of 
milk solids, the equivalent of 379 kg a
cow. - PA

Sheep stud dips back into the gene pool

By Iain Hyndman
Agricultural Editor

At least one Wanganui sheep stud is dipping back into the gene pool to keep pace 
with changing  industry needs in the Waipuna Romney has made small, incremental 
gains in its strain over the past 25 years through index selection proving two percent 
gains are possible and improved scanning of between 20 to 30 percent in the first 
cross over poor performing Romneys resulting in 120 to 140 percent lambing under 
hard Wanganui hill country conditions.
And testing and selection over the past 12 years has built in peace of mind for those 
farming the strain in facial eczema-prone areas.
Waipuna partners, Donald and Alistair Polson, like many others, consider wool a 
disappointment. Wool, they agree will be grown by sheep whether farmers like it or 
not, but its value must be maximised without compromising Meat characteristics.
Waipuna has developed its own fine wool strain alongside the elite flock and things 
look promising, yet current price differentials still pale beside current meat returns.
Donald Polson said in the latest Waipuna newsletter the positive for the partnership 
was the introduction of Finn genetics.
Growth rates too, has gained the stud a reputation. High growth rates are the norm, 
but have been tempered by other
selection criteria required for ewe efficiency objectives.
Hogget mating is the norm in the
United Kingdom and will become the norm in New Zealand, the Polsons say.
Waipuna's passion in the industry and its commitment to drive down new 
avenues, has attracted the attention of Breedline Technology - a group intent in 
developing a new breed for the future.
Breedline has approached Waipuna to help develop the Highlander.
This breed, Donald Polson says, will be based on Finn genetics, Texels 
and Romneys.
Mr Polson and wife Liz recently toured Mount Linton Station in Northern 
Southland - New Zealand's largest sheep farm.
Linton has a 60,000-strong ewe flock of which 40,000 are half Texel, half 
Romney and are farmed in the most difficult areas of the station.
There is no facial eczema risk, but the Polsons say the sheep are 
impressive in a difficult environment.
The station's next step is to introduce Finn genetics. The risks involved 
are high and Linton's decision was not made lightly.
Waipuna will bring to the Breedline project improved facial eczema 
tolerance and a natural tolerance of Finns to
balance the Texel influence.
Breedline is expected to be big with a large gene pool to select from and 
has simple objectives.
The objectives will focus on weight of lambs weaned per ewe and growth 
rates of lambs.
These ewes will be capable of rearing two lambs that exceed the weight of 
their mother by weaning time.

They will also be able to be fed well without the bug bear of bearings or 
getting cast.
Their fertility will mean that 50 percent of the ewes will be able to go to 
a terminal sire as less ewes are required to
provide replacements.
The programme will design ewes capable of growing lambs quickly to killable 
weights from ewes which do not have
huge mature weights.
Waipuna's Te Tui flock, farmed on the Fields Track block, will be 
dedicated to the project next mating and the
ewes with the Finn genes going from the recorded flock at Mangamahu to Te Tui.
 The Te Tui flock will become a  franchise flock for Breedline with Highlander ram 
hoggets  being available for mating in 2002.

No room for 'she'll be right' in modern NZ farming

By Iain Hyndman Agricultural Editor

Several hours of talkback radio on Monday night unearthed a disturbing 
public perception about New Zealand farming.
Radio Pacific talkback callers, mainly women, over a two-hour period late 
in the piece, appeared under the impression
that Kiwi farmers not only abused the land they farmed, but also the 
animals they tended for their very livelihood.
The lack of shelter for stock in the searing summer heat and in the deep 
depression of winter, the wholesale removal
of trees from the New Zealand rural landscape and a general rape of 
nutrients in the soil were among the main
concerns expressed.
While most callers were vague in their criticism and failed to provide 
accurate data to back their claims, the
perception appeared strong and widespread, which has to be of major 
concern to the farming sector.
Farming is a business, and like all businesses, farming has to make money 
to survive.
To survive, farmers must also embrace sustainable on-farm management 
policies designed to ensure the land they
farm continues to pump out maximum production year in, year out.
If they do not, they will very quickly be out of business.
It is generally accepted that the "she'll be right" farmers are gone.
Those who remained in the 1980s were wiped out when the 1987 stock market 
crash collided with the axing of
subsidies in the farming sector. The boys were sorted out from the men.
Farmers, in fact, are extremely
 conscious of the need for sustainability.
Farmers in the Wanganui, Rangitikei, Ruapehu and south
Taranaki districts have all embraced various programmes offered to
enhance on-farm policies already in place.
The Wanganui Hill Country Sustainability Group is nearing the end of a 
three-year project designed to teach the best
ways to map soils within the boundaries of individual farms to identify 
strengths and weaknesses.
The group includes farmers from the hard hill country to those on the 
easier finishing blocks on the front country.
It also includes representatives of the Department of Conservation, 
Agriculture New Zealand and green advocates.
 The project was a jointly-funded operation involving the Ministry of Agriculture and 
Forestry (MAF) Manawatu-Wanganui Regional Council's horizons.mw and the New
Zealand Meat and Wool Boards.
Lochie Grant, Wanganui-based soil conservator for horizons.mw, said the 
highly successful project was nearing completion and a field day to report findings 
would be held probably in the first week of November.
"Farmers are hungry to learn all they can about sustainability - it's in their best 
business interests to do so," Mr Grant said.
"If people take the time to look when they're touring rural areas, they will see more 
trees being planted on farms. Not only to help halt erosion on parts of their farms, but 
also to provide shade for stock.
"Farmers need to embrace sustainable management practices to survive - if they don't 
they hurt financially.
"In the Ruapehu District, a preferred management practice was adopted by Ohakune 
carrot growers. They did this voluntarily in conjunction with the local authority to 
protect their industry and the environment and soils they farm on," Mr Grant said.

Wide-ranging forestry field day

By Iain Hyndman Agricultural Editor

The wide spectrum between clearing old man gorse and harvesting and marketing 
trees is the focus of a Middle Districts Farm Foresters' Association field day in 
Wanganui next week.
The field day at Dougal McIntosh's Tokomaru West Rd property (rural rapid number 
964) will begin at 10.30am next Tuesday.
Association publicity officer Denis Hocking said topics would also include farm plans 
and resource consents, revegetation, joint venture financing and sustainability on 
erodable hill country.
"Conrad Black, a Canadian who formerly worked for Forest Cover, which is 
now part of Williams and Kettle, will speak
about revegetation, or more accurately, about oversowing pasture mix after 
clear felling - a very important subject," Mr Hocking said.
"We also hope to have a representative from Rayonier New Zealand who will talk 
about marketing. Dougal and myself recently sold some trees through Rayonier, an 
exercise that was particularly satisfying"And Lochie Grant, a well-versed man on soil 
conservation with horizons.mw, 
will deal with sustainability on erodable
hill country, which has special significance in the greater Wanganui 
district," Mr Hocking said.

New product is butter... but it isn't

It looks like butter, tastes like butter, and even has the same ingredients as butter - but 
the law says you can't call it butter.
New Zealand Dairy Foods this week launched a new reduced-fat dairy spread, 
Anchor Lite.
Anchor Products Te Rapa development technologist Chris Stainton said it had 
all the same ingredients as butter.
"All it contains is fresh cream and salt, just like standard butter."
But the law says for a product to be called butter it would need to have a 
minimum fat content of about 80 percent.
Anchor lite has only 61 percent milkfat - about 25 percent less than normal butter.
Dairy Foods general manager Jonathan Russell said it was the first time New 
Zealanders had the opportunity to purchase a 100 percent milkfat low fat spread, 
costing the same as butter.
It had not yet been sold overseas, but he said the Dairy Board was interested in the 
product.
Butter holds about 44.8 percent of the spread market in New Zealand at 14,538 
tonnes, worth about $57.7 million. - PA

Saving fertiliser dollars: it's all in the spreading

The costs in terms of crop losses could be huge. One farmer calculated $13,500 
annual crop lost because of poor spreading.

Farmers could be losing thousands of dollars a year simply because their fertiliser 
spreaders are not distributing evenly, according to Lincoln Technology research 
officer Russell Horrell.
He believes the problem is widespread.
The Ravensdown fertiliser cooperative recently employed Mr Horrell to calibrate 
farmers' spreaders in South Canterbury,
He estimated he had tested about half the commercial spreaders in South and Mid-
Canterbury, and many more farmer-owned machines.
"Most spreaders are not spreading evenly on their first run," he said. In fact, 75 
percent of those tested needed adjusting.
"The costs in terms of crop losses could be huge. One farmer calculated $13,500 
annual crop lost because of poor spreading," Mr Horrell said.
It was important farmers get the best value, he said, as fertiliser was the biggest single 
expenditure on a cropping farm.
"Many farmers don't fully appreciate it - there's an assumption their spreaders are 
perfect," Mr Horrell said. But his testing had shown otherwise.
In the last of a series of tests on South Canterbury spreaders, using 
urea, Mr Horrell set up a testing operation which
produced computer graph analysis of each spreader's effectiveness.
A series of black trays were laid in a line across a field and the 
spreader taken through. Each tray's "catch" was then
weighed in the field, with the data instantly recorded on a computer.
The trays were developed specifically for the purpose, limiting the 
bounce of fertiliser reaching them.
"This is the first time we have
delivered the service to the farmers in a way that you can give each 
farmer a chance to check each machine and
adjust it to obtain evenness," Mr Horrell said.
"We are also learning the importance of getting fertiliser on evenly 
because there is good evidence locally and
internationally showing that economic loss occurs long before there is 
any visual difference in a crop."
Mr Horrell will analyse the collected data and prepare a report for 
Ravensdown.
Greg Mawson, Ravensdown's Seadown store manager, said the various testing 
days around South Canterbury,
including St Andrews and Waimate,  were aimed at helping the farmers.
"In the long term it will help the whole industry," Mr Mawson said.
The fertiliser company's Mid-South Canterbury field officer, Stephen 
Jack, stressed the even spreading of fertiliser was
important not just for cropping farmers.
"Pastoral farmers, sheep, beef and dairy don't have the luxury of seeing 
a crop grow to full maturity and don't have the
visual appreciation of spreader unevenness that the cropping farmers do, 
possibly unaware they are not optimising
their fertiliser dollar." - PA

Confidence in farm sector levelling off, survey shows

Business confidence has levelled off in the New Zealand farm sector, 
according to latest results of the AC
Nielsen/Rabobank Rural Confidence Survey.
"There's been a distinct levelling-off in farm outlook for the coming 12 
months," says Rabobank National Manager,
Rural, Bryan Inch.
"The fourth bi-monthly snapshot of this country's primary industry shows 
little or no change in key indicators since
farmers were last questioned in June.
"And that tallies with the opinion of organisations like Federated Farmers, 
who have urged industry observers not to
get too carried away by reports of a rural resurgence," Mr Inch said.
More than half the farmers questioned for the latest rural confidence 
survey (55 percent) still predict better farm
economic performance in the coming year; however this is the same as in the 
previous survey. The number of those
planning to spend more on their properties also shows very little movement, 
43 percent this time compared to 42
percent two months ago.
Dairy farmers remain most likely to spend more (50 percent), followed by 
beef, sheep and mixed farmers. The total
number of farmers planning to spend less remains static.
Seventy-two percent expect higher gross incomes (compared with 70 percent 
in the July survey), while offsetting this,
94 percent expect to pay more for inputs (compared with 92 percent in the 
last survey).
Eighty-seven percent of dairy farmers say they will earn more money, 
followed by sheep (67 percent) and beef and
mixed farmers (64 percent).
While higher costs are still expected by most farmers, sheep and mixed 
producers are least
optimistic in this regard (96 percent).
Mr Inch says this new data reinforces the need to view farm fortunes 
realistically, notwithstanding recent publicity
about a rural boom.
"Farming is a cyclical business, with peaks and troughs, and its very 
important to remember that. Farmers need to
take steps to minimise the troughs and maximise the peaks, informing 
themselves of the big picture and planning for
the future."
Of the five rural confidence survey sectors dairy, sheep, beef, mixed 
farming and horticulture dairy farmers retain the
brightest outlook, with 71 percent anticipating better industry performance.
"That's down five percent from the June survey."
Sheep farmers are next most confident (49 percent), followed by beef (46 
percent), horticultural producers (44
percent) and mixed farmers (40 percent).
While there has been little variation in most areas surveyed, there has 
been a significant shift in interest rate outlook,
with 72 percent of those questioned expecting higher rates, down from 88 
percent in June.
Overall interest rate outlook has now improved three times in a row.
In March, 94 percent of farmers questioned expected rates to rise - now 
that figure is 72 percent.
The AC Nielsen/Rabobank Rural Confidence Indicator is the first survey of its type  
in New Zealand, and is assessed bi-monthly, using AC Nielsens 1000-strong panel of 
farmers throughout the country.
The next results will be released in November.

Insurer unsuccessful
The Commerce Commission has turned down a second application by Southern 
Cross Medical Care Society for clearance to buy rival health insurer Aetna Health NZ. 
In its second application, Southern Cross gave an undertaking that it would, if the 
proposal went ahead, divest a number of insurance policies 1 held by Aetna. 
However, the commission said it was not convinced that the divestment undertaking 
of the kind offered would answer its dominance concerns. Insurance brokers and 
Insurance said in August that the merged entity would dominate the market with 80
percent share.-PA
Loss of Force
Property writedowns have pushed cinema operator Force Corporation into an after-tax 
loss of $11.6 million for the year to June 30, compared with a $7.83 million profit last 
year. The result was after $11.6 million of non-recurring items and $2.11 million in 
depreciation. Total revenue was $54.8 million, up from 531.9 million.-PA
Happy with result
Telecommunications software company Telemedia Networks International yesterday 
posted its first annual result since listing, but its bottom line was a $62,000 net loss for 
the June year, down from a $1.186 million profit in the previous period. Revenue was 
up 326 percent on lost period's $5.71 8 million, while earnings before interest, tax, 
depreciation and amortisation (ebitda) were $3.398 million - 76 percent above the 
previous 1 5-month period, the company said. Profit before lax was $1.627 million 
compared with $1.772 million in the previous period, it said.
Chief executive and founder Chris Jones said the directors were delighted with the 
results far. Telemedia's first year as a public company. - PA

Market's big players fall in offshore selling

WELLINGTON.- Significant falls among eight of the New Zealand's top 10 
stocks knocked 1.25 percent off the NZSE-40's value yesterday as offshore selling 
increased, JB Were senior investment adviser Peter Stokes said last night.
"It's been a pretty active day today - there was a bit of offshore 
activity on the sell side," Mr Stokes said. "In the past few days the market has been 
fairly light so a bit of activity on the sell side had a pretty significant impact on the
market. But it came through over the course of  the day - the market didn't gape open, 
the downwards momentum took a while to build up."
The NZSE-40 Capital Index fell 26.08 points (1.25 percent) to 2061.84 
yesterday, while the NZSE SCI Capital Index of
smaller stocks came off 4.13 (0.08 percent) to 5376.58
Turnover totalled a healthy $121.7 million, but falls outnumbered rises 71 
to 36 among the 147 stocks traded.
 Market leader Telecom plummeted 18c to 637 on
turnover of 3.4 million shares worth $22.1 million, while
other top 10 stocks Fisher and Paykel, Fletcher Building and Independent Newspapers 
all sustained 10c losses to fall to 735, 228 and 380 respectively.
The Warehouse came off 11c to 585, Sky TV was down 9c at 368 number two 
stock Carter Holt Harvey was 4c lower at 175 and Fletcher Forests fell 1c to 82.
The only other stocks on the positive side of the top 10 ledger were 
Fletcher Energy, which gained 7c to 885, and
Tower, up 10c to 525.
Mr Stokes said interest in the New Zealand sharemarket had been light 
during the reporting season and there had
been little corporate news recently.
"Given the light buying we've had lately, the additional selling today 
moved the stocks around a bit
Elsewhere on the market, both Air New Zealand stocks fell 2c - As to 191 
and Bs to 275 - on the day the national carrier announced Qantas deputy chief
executive Gary Toomey would become its captain as widely rumoured.
 Telstra weakened 16c to 795, Port of Tauranga both fell 9c to 301 and 576
Ports of Auckland finished 8c lower at 410.
Advantage came off 7c to 236 and Baycorp was 5c lower at 1325, while Lion Nathan 
gained 5c
US blue chip stocks drifted higher while technology issues gave up early gains amid 
investors' continuing uneasiness about third-quarter earnings.
The Dow Jones industrial average closed up 37.74, or 0.3 percent, at 11,233.23 while 
the Nasdaq composite index fell 46.84, or 1.2 percent, to 3849.51 and the Standard 
and Poor's 500 index was down 7.27 at 1481.99
Analysts said the market volatility reflected the uncertainty of many 
investors heading into third-quarter corporate earnings reporting season. Most big US 
companies will he announcing their results in early to mid-October.-PA

New company formed to run deepwater port

WHANGAREI. - A new deepwater port at Marsden Point got the go-ahead 
yesterday after the owners agreed on the ownership, operation and  construction of the 
facility, Northland Port Corporation chairman Mike Daniel said.
The new port would be owned jointly by the Port of Tauranga and Northland 
Port Corporation through a new company, Northport, Mr Daniel said.
He would be the chairman of Northport.
Initial capital of $30 million would he contributed by the two port 
companies on a 50-50 basis, and the new company
would buy assets for the project from Northland Port Corporation, Mr Daniel 
said.
These assets included resource consents, floating plant, navigational aids 
and about 1.5 hectares of land, he said.
"Northport will also take over the port operations at the Port of Whangarei on 
completion of the new facility at Marsden Point in April 2002."
Carter Holt Harvey had agreed to put one million tonnes of forest products through 
the port each year, improving the economic viability of the new facility improved in 
the initial years of  operation.
"In consideration for providing this throughput agreement Carter Holt 
Harvey is to take a shareholding in the company
that will provide the 'on wharf' services at the new port," he said.
Northport Services would be a joint venture, in which Northport would have 
a two-thirds and Carter Holt Harvey a one-third interest.
It would provide a complete service from weighing the incoming forest 
products on entry to the new port through to loading of the ship, Mr Daniel said.-PA

Tasman move for airline boss

WELLINGTON - Former Qantas deputy chief executive Gary Toomey was yesterday 
named Air New Zealand's new
chief executive and analysts said the appointment of an Australian boss 
may be the national carrier's first step to
transfer headquarters across the Tasman.
However, Mr Toomey, 45, said he would be moving from Sydney to Auckland 
for the job and he was not aware of any
plans to move company headquarters.
 Air NZ chairman Sir
Selwyn Cushing, who
represents 30 percent
owner Brierley
Investments of
Singapore, said a move
was unlikely while he
was chairman but he did
not dismiss the idea.
"With the economic happenings at the moment with our dollar, with the 
stock exchanges merging, with Helen Clark
saying we should look at Australia's currency, it would be a bold man who 
said anything definite."
Sir Selwyn noted that even yesterday Ansett's revenues were $2.1 billion 
against Air New Zealand International's at
$1.7 billion.
With Australia's economy seven times the size of New Zealand's, Sir 
Selwyn said it was obvious revenues would soon be greater in Australia.

Progress being made on exchange talks

WELLINGTON - Good progress is being made on merger talks with the Australia 
Stock Exchange members of the New Zealand Stock Exchange (NZSE) were told 
yesterday.
Members were briefed on progress of the talks yesterday, the NZSE said.
"Members were advised they should not have any premature expectations about 
the outcome of the merger
discussions and that these were still at an early stage.
"However,  representatives of the NZSE's advisers UBS Warburg told members that 
good progress was being made in negotiations and it was hoped that a heads of 
agreement could be finalised around the end of the year, following which proposals 
would he put to a special meeting of members," the exchange said.
A demutualisation of the NZSE was envisaged if members approved proposals and 
any transaction would probably not be completed before the second quarter of 2001, 
at the earliest.
Exchange chairman Eion Edgar said the board was satisfied with progress on 
the potential merger discussion with the ASX.
"We are working closely together on a range of issues relating to a possible merger on 
other association, but it has to be said there are many, very complex
issues which need to be worked through and for that reason any merger 
proposal to be put to members, is still some way off.
"We are hopeful that the substantive issues can be resolved in the next three or four 
months, with a formal proposal going to members early in the New Year," Mr Edgar 
said.  
Deputy chairman Simon Allen was yesterday elected chairman of the exchange. 
- PA

Currency merger would see NZ Reserve Bank go

WELLINGTON.- A currency merger with Australia would almost certainly spell 
the end of New Zealand having its own
Reserve Bank, Prime Minister Helen Clark indicated yesterday.
She told Parliament a joint central bank between Australia and New Zealand 
would clearly be the outcome of a
common currency.
"Were there to be a merged currency there would be required to be a common 
central bank as is the case with the euro," Miss Clark said.
She was responding to questions from Opposition MPs over whether currency 
union would end New Zealand control
over its own monetary policy.
The Reserve Bank plays a key role in the economy by raising or lowering 
interest rates in response to growth and
other economic indicators to control inflation.
Opposition leader Jenny Shipley said the Australian Financial Review had 
suggested yesterday if there was a
currency union New Zealand would, in effect, be ceding control of its 
interest rates to the Australian Reserve Bank.
Australian Treasurer Peter Costello, meanwhile, had suggested that a 
currency union between New Zealand and
Australia "would in effect amount to an Australian dollar takeover," she 
said.
Miss Clark rejected the suggestion, but said the Government welcomed 
debate on the issue.
Currency union wasn't on its formal agenda but there had been a lot of 
debate and work done on the issue already,
including by respected economists and Treasury officials, both under the 
former National government and now the
new administration, she said.
Miss Clark revived the currency debate during a visit to New York last week 
in which she suggested formal work on
the proposal might commence sooner than expected.
She indicated the issue might be put on the agenda once Australia and New 
Zealand had completed their work on tax
harmonisation and business rules.
Mr Costello yesterday said New Zealand might be allowed to use the aussie 
dollar if it wanted to.
"As far as the Australian government is concerned, the Australian 
government is not proposing any change to the
Australian currency or to our monetary arrangements," Mr Costello told 
reporters.
"We're not interested in any new currency, any third currency. Now if 
somebody came along and said we would like
to adopt your currency and your monetary arrangements we would look at 
them. But no such request had been
made."
The New Zealand and Australian prime ministers are due to meet in Australia 
later this month but Miss Clark said a
common currency wasn't on the formal agenda for talks.-PA

Energy up before commission thumbs down

WELLINGTON - The focus was again on Energy as the sharemarket closed 
slightly  down yesterday after a busy day's trading.
The Commerce Commission's eagerly awaited decision on Shell's application to 
acquire Energy came through after the market closed, declining  the application. 
Fletcher Challenge announced its restructuring on Tuesday, including the sale of 
Fletcher Energy to oil giants Royal Dutch Shell and Apache Corp.
At the close of trading Fletcher  had gained
6c to 936 on turnover of 10.8 million shares worth $101.3 million.
Cavill White equities dealer Alan Wills said there was strong interest 
in the stock before the decision was released.
"The interest there is that people are buying  the stock at a discount to 
the assumed total value of the bid from Shell, and they see that as very good buying. 
On the other hand there are 
people who are happy to
off-load  at these levels  and move on," Mr Wills said.
"The people who are buying the stock are obviously convinced that the Commerce 
Commission will approve the deal, conversely those who are selling are happy to go 
at this price rather than take any risk on the decision and other aspects of the offer."
 The NZSE-40 Capital Index closed down 0.13
points at 1918.83 on turnover of 49.54 million shares worth $198.06 million.
 The NZSE-SCI Index of smaller companies fell 47.52 points (0.94 percent) to 
5029.44.
Falls doubled the amount of rises 70 to 34 among the 152 stocks  traded 
yesterday. Telecom  reached a new low of
529 early in the day but recovered to close up 5c to 540 on turnover 
of 8.18 million shares worth $44.52 million.
Mr Wills said last minute selling in Telecom brought the index down  at 
the close of trading after it had been in positive territory for most of the day.
"There is a lot of diversity of opinion on Telecom and that's what's 
creating the turnover."
Fletcher Forest lost 1c to 42 on turnover of 11.74 million shares worth 
$5.02 million, and Building fell 12c to 183.
Mr Wills said an announcement of the capital return of $151 million to DB 
group shareholders just after the market
closed yesterday would be "favourably reacted by the market tomorrow".
DB group closed up 1c at 301.
The Warehouse closed up 10c at 585 on news of a brokers' presentation in New York 
this week.
Other rises were AMP, up 15c to 2180, Sky City, up 6c to 681 and Tranz Rail, up 11c 
to 375.
Among the falls. Montana closed down 20c at 300, Baycorp fell 15c to 1210, Frucor 
dropped 15c to 200 and Metlifecare lost 18c to close at 102.
New Zealand Refining dropped 10c to 1160. - PA

Dollar sinks to record low

 WELLINGTON - The New Zealand dollar plunged to a record low against the US 
dollar, sinking to US39.64c, following the Commerce Commission's third refusal of 
Shell's offer for Fletcher Energy yesterday.
 The kiwi was trading at
US40.40c before the
announcement late yesterday
afternoon, one day earlier than expected.
The previous low for the beleagured kiwi was US39.90c on October 4.
One currency dealer said the announcement pushed the dollar and the weak aussie 
exacerbated its fall.
"Basically the Fletcher's announcement pushed it from the US40.40c area down to the
US40,10c. and then market sentiment and the weaker aussie pushed it lower," he said. 
"The implications probably are that the new New Zealand shareholders won't be 
repatriating their US dollars so there won't be any buying of New Zealand dollars 
against the US.
"It depends what the sentiment is (whether the kiwi falls further). Short-term it looks 
like it has had the effect of driving the kiwi down."
At 6.15pm the kiwi was at US39.64c. - PA
 
Fletcher plans run aground

WELLINGTON The Commerce
Commission has declined Royal Dutch Shell's
application for clearance to buy Fletcher
Challenge Energy, raising questions over the
Fletcher group's restructuring plan released
earlier this week.
Commission chair John Belgrave said he was concerned about Shell 
acquiring or strengthening dominance in all three
of the relevant energy markets.
"The commission can only give a clearance if it is satisfied that a 
proposed acquisition would not, or would not be
likely to, result in dominance being acquired or strengthened in any 
market," Mr Belgrave said.
The relevant markets were the current gas production market, the market 
for gas production after 2009, and the
market for production of liquified petroleum gas.
Mr Belgrave said further details would be available when public copies of 
the commission's full decision were released
early next week.
The setback, announced after the sharemarket closed yesterday, comes as a
surprise to stock watchers.
Fletcher Challenge spokeswoman Ginny Radford told NZPA her company still 
needed to read the decision and would
likely make a statement today.
The decision was released yesterday rather than today, the commission 
saying it had got through its work early.
A broker, who would not be named, said the decision put a question mark 
over Fletcher's long-awaited plans to split
the group into three separate companies, the details of which were 
released on Tuesday.
Shell and American oil company Apache Corp had agreed to buy Fletcher 
Energy for $4.6 billion.
Fletcher Building and the problematic Fletcher Forests were to have been 
split off as standalone companies, the debt
burden latter division being recapitalised.
 A new technology company, Rubicon, was to take technology Fletcher businesses 
and, like Fletcher Energy, was involved in underwriting Forest's financial 
recapitalisation. - PA

Wool sales pass-in rates high

 WELLINGT0N - Wool prices fell at yesterday's Christchurch  and Napier wool 
auctions despite a further slump in the value of the New Zealand dollar against key 
exchange rates.
A total of' 21,282 bales (2595 tonnes, clean) were offered for sale, but 14.6 percent of 
the wool failed to meeting farmers' price reserves.
At Christchurch, where 12,710 bales were offered, there was a pass-in rate of 19 
percent during the morning sales, while at Napier the pass-in rate was only 11 percent. 
The fine wools indicator slumped 53c/kg from fast week to 1681c, the medium 
indicator fell 8c/kg to 583c, and the strong wools indicator fell 6c/kg to 439c. - PA

Deane worried at Telecom share fall

Telecom presented a positive face to shareholders at its annual meeting  yesterday but 
admitted being unhappy with its share price.
Telecom  chairman Rod Deane said the company was going through a transitional 
period and was confident of completing a takeover of Australian telco AAPT, of 
which it is an 80 percent owner.
Its share price has plummeted  this year, tracking the falling dollar and sharemarket, 
from a high of $9.81 in April. It closed yesterday up 5c at $5.40.
Dr Deane said Telecom was concerned about the decline in share price which had 
been more severe in the past six months than expected.
"That can be explained by a re-rating around world of the telecommunications stocks 
as people have become more concerned about their ability to adapt to the future and 
change, and some concerns about people overseas paying too much for spectrum for 
mobile communications," he said.
"We're optimistic that perhaps we won't have to pay quite as much in New Zealand."
Traditional business was providing a decreasing slice of Telecom's revenue, chief 
executive Theresa Gattung said.
In the year ended June, national call minutes increased by about 5 percent 
while the average price fell by 20 percent.
"The resulting decline in revenue was offset largely by a 26 percent 
increase in calls to our cellular network, and an 8 percent increase in national 0800 
revenues," Ms Gattung said. – PA

Business blooming

Business Briefs with Ada Hill

A love affair with delphiniums combined with Wanganui's climate and low 
property prices has resulted in the opening
of a niche business on the city's outskirts.
Terry and Janice Dowdeswell shifted to their Brunswick Rd property a year 
ago from Tuakau where they are now
operating Dowdeswell's Delphiniums.
While their primary market is centred around delphiniums the couple also 
grow other plants which complemented the
delphiniums such as camponella, aquilegia and russell lupins.
The Dowdeswells breed delphiniums, sell the seeds on the export market 
and also supply garden centres with the plants. They also offer a mail order service.
They have been in the business for about 15 years.
Starting from Labour Weekend the business will be open two days a week on 
Fridays and Saturdays.
Attention women everywhere
The search is on again for gutsy New Zealand businesswomen. 
Nominations have opened for the annual Businesswomen of the Year Awards.
Organised by Her Business magazine, past winners include Judy Garvey, of 
Jaycare Products, Christchurch; Suzanne Sudano of Fineline Nurseries, Hamilton; 
Moira Haddrell of Cambridge Bee Products and Jacqui Goold of New Look Clinics, 
Taupo.
Her Business editor Fiona Powell said the award was a way of 
acknowledging women in business.
"We are looking for women who have experienced business and personal 
growth, women who possess an 'I can do it' attitude and who have an inspirational 
story to share which will 
motivate and encourage other women in business," she said.
The joint overall winners (one from each of the North and South Islands) 
are decided on by their peers who vote for
their choice of winner from a short-list published in the 
January/February issue of Her Business.
Nominations this year close on November 17.
The joint overall winners will feature in the March/April issue of Her 
Business and receive a prize package worth over $8000.
Awards will be presented at the Women in Business NZ Ltd conferences
in Auckland and Christchurch in March 2001.
Confidence booster
A speaker's gym for women is what the guest speaker at the next meeting 
of the Wanganui Women in Business
Network is offering.
Wellington-based Barbara Koziarski has created an illusion of confidence 
when speaking in public and will
demonstrate how it works.
Her presentation offers simple, practical steps to more confidence, 
composure and credibility.
The meeting will be held on November 1, upstairs at the Wanganui 
Veterinary Services premises.
Changes rung
A change of owner means a change of name for Wanganui's Phones on the Ave.
The Victoria Ave shop was opened 12 months ago by its then owner 
Wanganui's Electro-Guard Communications.
Last month the business was bought by Quest Mobile.
Shop manager John Goodare said the shop's name was changing to The Mobile 
Fone Shop.
The change is expected to happen on November 1.

Solid growth
Coal miner Solid Energy has reported an after-tax profit of  $1.26 
million for the 1999/2000 year, a turnaround from last year's $86 million loss. State-
owned Solid Energy's sales turnover for the year was $185.9 million, up from $159.9 
million in 1998/99. SE chairman Tim Saunders said the company still 
had a lot of work ahead to improve its
competitiveness, although its operating performance had improved and it was in a 
stronger position than  12 months ago. - PA
Outlook fine
State weather forecaster MetService yesterday reported a $3.7 million 
profit for the 1999/2000 financial year, up from
$3.2 million last year. The result was achieved despite increased 
competition from internet-based suppliers of weather
information, chairman John Cook said. - PA
Rates cut
ASB's Internet subsidiary BankDirect has dropped its two, three and five-year fixed 
mortgage rates because longer term wholesale rates looked positive. Bank Direct 
lowered its two-year fixed rate from 8.2 percent to 8.1 percent, its three-year rate from 
8.25 percent to 8.1 percent, and its five-year rote from 8.3 percent to 8.2 percent. – PA



