

 
Japanese interested in kina export deal 
  
INVERCARGILL 
A BIG Japanese corporation interested in buying a traditional Maori seafood, kina (sea urchin), plans to take samples 
from Fiordland early next month as part of negotiations for an export deal. 
Kanaguchi Corporation representatives will visit Fiordland to take samples for a Japanese restaurant chain, Skylark, 
according to kina exports advocate George Wast, of Wanaka. 
Marine scientist Akira Kanaguchi, son of Japanese tycoon Teruo Kanaguchi, a long-time backer of the proposed 
Southland-based kina industry, would visit and collect the samples, as part of negotiations between Kanaguchi 
Corporation and Skylark, Mr Wast said. "At least they're meeting there and we're making headway." 
Skylark employs 4192 people in 1750 restaurants and shops in Japan. It has a capital value of 12.9 billion yen (NZ$295 
million). 
According to Mr Wast, the Kanaguchi family is prepared to invest several million dollars in the project, which could 
create 150 jobs. 
Mr Wast has been battling officials and politicians for 15 years in a bid to get a kina industry established in the south. 
He sought permission to harvest 1000 tonnes of the sea urchin from around the Southland coastline when the total 
allowable catch for Southland was set at 200 tonnes. 
He came close in 1993 when the Fisheries Ministry instigated a kina development programme in Fiordland. But the 
1000-tonne limit was for all comers, and the programme collapsed because the other harvesters could not find markets 
for the product. 
Mr Wast said Skylark would take all kina grades, which would be beneficial in the initial stages of developing the 
fishery. 
High-grade kina would be packaged for export while lower grades could be used for pastes and sauces. 
A frozen product was also being offered, Mr Wast said. _ NZPA

French interest in Tranz Rail may foil restructuring plans 
  
FRENCH rail and bus operator Transdev says it wants a significant stake in the Tranz Rail, a move that could stymie 
restructuring plans. 
Transdev spokesman Bruce Kohn said yesterday that its initial interest was in commuter services, which Tranz Rail 
recently announced it wanted to contract out because it wanted to become solely a goods carrier. 
"Our interest changed dramatically last Friday afternoon, when both Fay Richwhite and Wisconsin Central said they 
were putting up their holdings in Tranz Rail," Mr Kohn said. 
If Transdev bought the stakes _ 14 per cent and 24 per cent respectively _ it would own 38 per cent of Tranz Rail and 
become the controlling shareholder. 
Mr Kohn would not speculate how that would affect Tranz Rail's restructuring, which aims to cut staff to 600 from 
4000. He noted Transdev's position was not fully developed as yet. Transdev would "get into discussion" with Tranz 
Rail, he said. 
Asked if an approach had been made to Fay Richwhite and Wisconsin Central, Mr Kohn said: "Not to my knowledge at 
this point _ there is a stated interest, which will be pursued." 
Tranz Rail's United States-based chairman, Robert Wheeler, is facing an attempt by former Wisconsin chairman Ed 
Burkhardt to wrest back control of the company. 
Mr Kohn said Transdev, which has experience running rail and bus systems in Britain, was proceeding with plans to 
get an interest in the bus market in Auckland. It runs trams in Melbourne, and he said it was expanding in Australia. 
Other companies to express an interest in Tranz Rail include truck and shipping company Owens Group. Guthreys 
Coachlines is looking for an overseas partner interested in taking over long-distance rail services. Infratil is considered 
to be a strong contender in a consortium with other parties but is not commenting. 
Tranz Rail shares closed unchanged at 355 cents yesterday. _ NZPA 
 
  Steel and Tube set to spend 
  
  
 
LOWER HUTT firm Steel and Tube Holdings had up to $70 million to spend on growing its core business, chairman 
Bob Every said after the annual meeting in Wellington yesterday. 
Dr Every said Steel and Tube had been through a period of uncertainty as its main shareholder, Australia's BHP, 
divested its stake in the company. 
"Steel and Tube has been under a cloud for some time while BHP considered its shareholding," he said. The issue had 
been resolved, and the 50.01 per cent stake was now held by listed steel business OneSteel, which BHP floated in 
October. 
Steel and Tube had been limiting itself to operational matters and was now able to make decisions on its strategy, Dr 
Every said. 
A strategic review was expected to continue during the next six months, and the company was looking at options to 
grow its core business. 
It had a debt gearing of only 20 per cent and could afford to raise this up to 50 per cent _ giving it between $50 million 
and $70 million to spend on an acquisition. 
The company had lost its way in the 1980s by getting away from its core activities, and this time around the growth 
would be restricted to its core industrial products and metals business, or activities that could be bolted on to that. 
There was also the possibility of growth in its Canadian business, and in the long term this business should either be 
expanded or sold. 
Dr Every also announced the retirement of director Alex Paterson, who he said had been with the company 25 years, 
and was a strong advocate for minority shareholders. 
Steel and Tube shares closed down 2 cents at $1.43 yesterday. 
 
 
   
  Text message costs create enigma 

Mr Pietersma . . . `we will be surrounded by chip intelligence' 
  
  
 
WHY people pay for small volumes of data such as text messaging on their cellphones, but expect to have free access 
to vast tracts of text on the Internet is a phenomenon that draws considerable debate at the Swedish headquarters 
consumer laboratories of telecommunications giant Ericsson. 
The company's head of global Internet applications and solutions, Haijo Pietersma, said the difference was that people 
would pay for something that is for a personal and immediate need. 
Mobile phones or hand-held electronic devices drive personal services that are immediate anywhere at any time. And 
they do have a charge. 
Mr Pietersma said the most popular pay service on a mobile phone was the different tunes and tones that could be 
downloaded. It made the phone personal. 
It was an interesting paradox that no one would pay a fee for each e-mail but would on a mobile service, he said. 
Soon consumers will be able to access their e-mail accounts on mobile phones. This week, for example, Ericsson 
announced that it would soon introduce into the United States an international telephone with personal organiser and 
Internet services, including e-mail, called R380. 
Mr Pietersma is in New Zealand _ his second visit in a year _ talking to the Government, customers and suppliers. 
Two weeks ago Ericsson New Zealand and local software company Synergy International announced the creation in 
New Zealand of a centre of excellence that is to provide 150 hi-tech jobs, developing mobile Internet services for both 
New Zealand and foreign markets. 
Mr Pietersma said New Zealand had a worldwide reputation as an early adopter of technology. And that put the country 
in a good position to test new products. Mobile Internet _ putting the Internet on wireless services _ would affect 
consumer behaviour, he said. 
People saw mobile devices as personal tools that then became integral to their lifestyle. 
They were rapidly being improved in areas such as voice recognition of text and the ability to download information 
using little battery power, Mr Pietersma said. 
Soon people would be carrying a great number of devices around, from smart-chipped credit cards to Internet or WAP 
(wireless application protocol) cellphones and photography equipment. 
"We will be surrounded by chip intelligence everywhere we go," Mr Pietersma said. 
 
 
  Merger plan stirs fears of more losses for NZ 
  
  
 
THE Stock Exchange's planned merger with its bigger Australian neighbour faces opposition amid fears it will lure 
more New Zealand company head offices to Australia without delivering concrete benefits. 
Some broking and financial market sources are concerned that any merger would be effectively a takeover by the more 
powerful ASX, leaving New Zealand companies with higher listing fees, sharply higher business compliance costs and 
the loss of sovereignty over an important capital market. 
They doubt if the cost of raising new capital would fall significantly in the more liquid trans-Tasman sharemarket _ 
particularly for small and medium-sized companies struggling to attract research attention. 
"All the headlines have been suggesting the deal is a fait accompli," Ord Minnett Securities chairman John Rattray said 
yesterday. "My view is that a whole lot of water has to pass under the bridge before a final decision is made. We have 
to be focused on the benefits and absolutely certain this isn't selling down the creek New Zealand's economic 
independence and capital market sovereignty." 
The NZSE and ASX are aiming to strike a merger agreement by next month, before it is put to NZSE members for 
approval early next year _ it needs endorsement by 75 per cent of members. The merged exchange could be in use next 
July. 
Longstanding ASX overtures were firmly rejected by the NZSE, till a sudden change of heart at talks in Sydney three 
months ago when the exchanges agreed to consider options. 
Financial market sources said yesterday that implications of an exchange merger went far beyond the mechanics of 
share trading and should not be left only in the hands of the NZSE's sharebroker owners. The sharemarket's poor 
performance in the past decade had little to do with the NZSE's standalone status, they said. It reflected the track record 
of several big companies. 
Wellington merchant banker Lloyd Morrison strongly opposes the proposed merger, saying it would force more New 
Zealand companies to move to Australia without guaranteeing stronger investor support and a lower cost of capital. 
"Australian capital market players have never been much more than patronising in their commitment to the success of 
New Zealand companies." 
Mr Morrison's merchant banking company, Morrison and Co, manages listed utilities investor Infratil and provides 
specialist infrastructure advice to clients in New Zealand, Australia and Britain. 
He believes that under a combined exchange, capital raisers, stockbrokers, financial advisers, corporate lawyers and 
accountants would focus on Sydney and Melbourne, leading to a loss of creative talent from New Zealand. "Maligned 
as this sector is, it has historically employed many of New Zealand's most creative and intelligent people _ many of 
whom are today responsible for the emergence of a growing, albeit still fledgling, creative technology sector." 
An institutional investor and AXA New Zealand's equity manager, Andrew Bascand, said that within a year new 
technology and a further globalisation of markets would fundamentally change securities and foreign exchange trading. 
"It's clear that the little cosy exchanges will have to face competition from other forms of trading," he said. "So these 
exchange mergers will be at the side of this trend." 
United States capital market practices were spreading around the world, suggesting New Zealand should align itself 
with the US instead of Australia. 
Mr Bascand agreed that a NZSE-ASX merger would not reduce capital costs for companies, which was influenced by 
the performance and potential of individual businesses, he said. 
"And talk to any Australian fund manager or investment bank and they'll tell you the compliance costs there are 
enormous, even compared with the US." 
 
 
  Big changes for Telecom, says paper 
  
TELECOM will announce a big restructure of its trans-Tasman operations within weeks as a forerunner to a bid for the 
A$15 billion-plus (NZ$20 billion-plus) mobile business of Cable and Wireless Optus, the Australian Financial Review 
reported yesterday. 
The newspaper, in an unsourced story, said chief executive Theresa Gattung was finalising plans to separate Telecom's 
and AAPT's wireless activities into a stand-alone vehicle that would absorb the Optus mobile business to become the 
Australian market's No 2 wireless operator. 
Optus said on Wednesday that it would soon disclose details of a planned break-up, which will trigger a bidding war 
for the company's assets _ its mobile, data and business services and consumer and multimedia operations. The 
company expects to receive indications of interest before Christmas. 
The group's controlling shareholder, Cable and Wireless, said it wanted to own 100 per cent of Optus's data and 
Internet business but declined to say if it would make a bid. Telecom with Japanese wireless giant DoCoMo is 
considered a serious bidder. 
Telecom's Optus bid is expected to pitch against other cashed-up groups including Vodafone Pacific, subsidiary of 
Vodafone plc, and Singapore Telecommunications, SingTel. A Vodafone bid for Optus's mobile assets could run into 
competition issues. It has 18 per cent share of the mobile market in Australia. Combined with Optus's 33 per cent it 
would have 51 per cent, making it the leading player ahead of the current biggest player Telstra with 47 per cent. _ 
NZPA 
 
 
  Ryman posts $7 million half-year profit 
  
  
 
RETIREMENT village developer Ryman Health reported yesterday a healthy $7 million profit for the half year to 
September 30, up almost $1 million, or 10 per cent, on the previous corresponding time. 
Turnover for the period was up from $23 million to $28 million. 
Ryman said its continuing success was because of steady growth in New Zealand's elderly population and the diversity 
of its activities. "The company sells long-term healthcare solutions, rather than real estate, and is therefore relatively 
unaffected by residential property trends." 
Ryman's assets include the Malvina Major, Ngaio Marsh, Rita Angus and Shona McFarlane retirement villages. _ 
NZPA 
 
 
  Oil well project 
  
US explorer Swift Energy has announced plans to build a multimillion-dollar processing plant in South Taranaki so it 
can bring up to four Rimu oil wells into commercial production by the middle of next year. The size and cost of the 
project, near Mokoia, has yet to be decided, but up to $25 million could be spent by operator Swift Energy NZ and its 
partners in the next year or two. 
 
 
  Appeal dropped 
  
  
 
Two Wellington directors have dropped their appeal against bankruptcy. Willard Amaru and John Baylis were declared 
bankrupt in August after failing to pay statutory management and legal costs of $52,791.61, relating to themselves and 
their investment companies, IMI Pacific Group and Walakahai Pacific Corporation. The men are facing Serious Fraud 
Office charges. 
 
 
  Earnings' upset 
  
Building materials group James Hardie Industries, which suggested in August its earnings were about to be hammered 
by a steep fall in gypsum prices, said yesterday it did not expect its full-year profit to grow. The Australian company is 
28 per cent owned by New Zealand-listed Brierley Investments. 
 
 
  Results delayed 
  
Supply chain management and Internet shopping co-operative E-force has been granted a Stock Exchange waiver to 
delay issuing its half-year results. As a result of the illness of two directors, E-force has till November 24 to make its 
report, originally due on Tuesday. 
 
 
  Job site rebranded 
  
  
 
Independent Newspapers' job vacancy site JobNet has been rebranded to align with its parent site www.stuff.co.nz. 
From Monday it will be known as www.jobstuff.co.nz. 
 
 
  Companies' futures dominate 
  
THE sharemarket was dominated yesterday by speculation over the future of big companies Fletcher Energy and 
Telecom Corp. 
Energy punters keenly awaited today's Commerce Commission ruling on whether Royal Dutch Shell can buy the 
company, pushing Fletcher Energy shares up 5c at 850 by close. 
Telecom turned over a brisk $61 million in shares, and ended the day down 1c at 582. 
The NZSE-40 capital index closed up 0.60 points at 1994.93, and smaller stocks firmed with the NZSE-SCI capital 
index up 7.39 points to 5146.24. Total market turnover of 75.87 million shares was worth $128 million. 
In all, there were 44 rises and 42 falls among the 138 stocks traded. 
Among the other Fletcher listings _ which would benefit from progress on the sale of Energy as they are also to be split 
off as separate businesses _ Building was down 3c at 200, Forests was unchanged at 27 while its rights topped the 
exchange's top-10 by turnover with a flurry of bargain-hunters turning over 39 million rights shares. Rights ended 
down 0.3c cents at 2.2. 
DB Group was up 15c at 350 in very light trade. 
Steel and Tube Holdings dropped 2c after company chairman Bob Every said at its annual meeting that trading 
conditions in the industrial sector remained fragile. 
Air NZ foreign B shares lost 2c to 198, and AMP came off its recent highs to finish down 5c at 2440. 
Axa Asia dropped 8c to 397, IT Capital lost a cent to 23 after its results announcement yesterday. The Warehouse was 
up 5c to 680. 
  
 
 
  Kiwi quietly drifts up 
  
  
 
THE New Zealand dollar capped off a quiet day by drifting up from its opening price to close at US39.96c. 
An ANZ currency dealer said the New Zealand dollar traded within a tight range of US39.80c and US40.00c. The Kiwi 
hovered about US39.84c early yesterday morning. 
"It was a very quiet day, but there was an underlying buying interest from a Wellington bank," he said. 
"The New Zealand dollar does seem fairly well bid at the moment, it's in reasonable demand. It probably is Australian-
related buying so it is offshore," he said. 
Today is likely to provide a quiet end to the week, though markets will be waiting for the Commerce Commission's 
decision whether to allow Royal Dutch Shell to buy Fletcher Challenge Energy. 
In a commentary published on Wednesday, BNZ said indications from the previous deal were that professional 
investors would look to hedge the US dollar payment component of the proposed deal. 
Long-term, approval of Shell's application would have a small positive effect on the Kiwi as sentiment improved from 
a more "lassez faire" approach by the commission, the bank said. If the commission ruled against the application, the 
effect would be a short-term negative for the Kiwi. 
In the United States, international finance house Goldman Sachs said the Kiwi would firm to US48c in three months 
and to US53c in 12 months. 
The aussie traded at US52.12c, at 5pm New Zealand time, having eroded its gains on Wednesday afternoon after 
rumours of significant buying by an Australian government institution. 
The aussie reached up to a day high on Wednesday of US52.43c. 
The Reserve Bank of Australia said yesterday it had bought a net A$100 million (NZ$132.36 million) in its foreign 
exchange market transactions in October. The RBA's foreign exchange transactions in September amounted to A$506 
million. 
The euro was trading at US85.82c at 5pm in New Zealand, up from US85.62c yesterday morning. 
The Kiwi closed at A76.67c (A76.20c at Wednesday's close) 43.49 yen (43.05), 28.00 pence (27.84), 0.9107 marks 
(0.9071), 0.7098 Swiss francs (0.7049 ), and 0.4656 euro (0.4638). 
The trade weighted index was at 46.94 (46.71), and with 90-day bill yields unchanged at 6.65 per cent the monetary 
conditions index tightened to minus 1011 (minus 1039). 
On the debt market, the February 2001 yields were at 6.54 per cent (6.55), the April 2003s were at 6.57 per cent (6.58 ), 
the July 2009s were at 6.60 per cent (6.62 ), and the November 2011s were at 6.62 per cent (6.64). _ NZPA 
 
 
  Panel speaks out on `misguided' political criticism 
  
THE Stock Exchange's Market Surveillance Panel attacked the media and politicians for misguided criticism of the 
sharemarket performance and its regulatory regime. 
Chairman Keith Familton said in the annual report that the panel would not be drawn into the debate about the state of 
the sharemarket. "However, I must say that much of the media and political comment has been misguided in blaming 
the exchange or the regulatory regime. There is sometimes media criticism of a perceived lack of teeth of bodies such 
as the panel." 
The panel closely investigated all breaches of the listing rules and had taken a firm stance on several occasions, Mr 
Familton said. "While the outcome may be a censure or critical comment from the panel, which the media delight in 
regarding as a slap on the wrist, it is evident from our discussions with listed issuers under investigation that public 
exposure of their shortcomings is viewed seriously by them. 
"The market takes note of lapses and the panel's determinations," Mr Familton said. 
He cited the at least seven announcements it made in relation to NZ Oil and Gas and Otter Gold Mines dealing with the 
exercising of votes on unallocated shares held by employee shareholder plans. NZOG also received the only censure 
during the year, for failing to provide adequate details in a notice of meeting. The previous year there were three 
censures. 
There was one company suspended, Roller International. In 1999 there was one suspension also. The panel dealt with a 
total of 147 matters in the year to June 30, compared with 162 last year. Waivers granted from listing rules for related 
party transactions totalled 43, up three. Waivers from all other listing rules totalled 64, down from 79. 
 
 
  Pyne Gould bid for rest of SEU 
  
  
 
PYNE Gould Corporation is offering $1.07 a share for all the shares it does not already own in South Eastern Utilities. 
The takeover offer ends a near two-year search by SEU to find investments for the $64 million cash holding. PGC 
already owns 50.3 per cent of SEU. _ NZPA 
 
 
  Telstra and PCCW raise $5b loan for IP alliance 
  
  
TELSTRA CORP and Pacific Century Cyberworks have raised a US$2 billion (NZ$5.08 billion) loan to set up an 
Internet protocol joint venture company. 
Telstra said the fully underwritten, syndicated loan would be led by Chase Manhattan Bank and Barclays Banks. 
It is part of the revised terms for Telstra's A$4 billion alliance with PCCW to set up an IP and mobiles businesses in 
Hong Kong. 
Telstra group managing director finance and administration Paul Rizzo said the positive response from banks reflected 
the market's confidence in the IP backbone company. 
At 1.18pm Sydney time, Telstra shares were one cent higher at A$6.76. _ AAP 
 
 
  Hedging costs farmers $56,000 
  
FOREIGN exchange hedging by the dairy industry has cost each New Zealand dairy farmer about $56,000 during the 
past three years. 
Hedging losses for the years to May 31, 1998, 1999 and 2000 total $821 million, though the Dairy Board said they 
were "opportunity costs" not losses, because no speculation was involved. 
However, the board's global finance chief, Peter Schuyt, concedes farmers would have been better off in this period if 
the board had not hedged at all. 
But if the industry had not hedged the exchange rate between the United States dollar, in which it mainly trades, and 
the New Zealand dollar between 1990 and 1997, dairy farmers would have been more than $700 million worse off, he 
said. 
Hedging loss figures issued by the board under the Official Information Act show that in the year to May 31, 1998, the 
loss relative to no hedging was $292 million; in 1999, $374 million. 
The loss for the year to May 31 2000 was $155 million, disclosed in the board's 2000 annual report. 
The 1999 loss was not disclosed in that year's annual report. 
Mr Schuyt said the hedging policy had since last year been the responsibility of dairy company executives working 
through an industry treasury committee. 
A hedging operating cost had been disclosed in the 1998 financial statements and the decision to disclose the year 2000 
hedging loss followed "another look" at reporting and accounting standard requirements after non-disclosure in 1999. 
"We constantly look at these things, so for the year ended May 31, 2000, we had another look at it. We got our auditors 
to look at accounting, reporting standards another year on. 
"They put another interpretation over the reporting standards which said where you are hedging future cash flows and 
you don't have a known, specific, invoiced cash flow, that technically gives rise to a loss which you must report, which 
we now do. But again the number ($155 million) doesn't mean anything." 
The board believed the most "meaningful" way of informing shareholder-farmers of the effect of currency movements 
was through disclosure of the annual effect of movements in the board's conversion rate _ the average rate at which US 
dollars are converted to New Zealand dollars. 
The benefit of a lower conversion rate in the past three years was $30 million in the 1998 year; $477 million in 1999; 
$355 million in 2000 _ a total of $862 million. 
The net effect of the board's hedging policy was about one cent a kilogram of milk solids annually. 
"The industry's view is that doing nothing is not an option and therefore the comparison is generally meaningless. 
There are some people in the industry who would prefer we took out no hedging whatsoever, but the industry has gone 
back to the directors of each dairy company and confirmed this is exactly the strategy and the policy they want. 
"In the long term don't expect to make significant gains or benefits out of the hedging policy we have. You can't," Mr 
Schuyt said. 
 
 
  Kiwi Dairies chief looks abroad for shareholders 
  
KIWI Dairies chief executive Craig Norgate says his vision for the cooperative dairy industry includes farmer 
shareholders outside New Zealand. 
In the company's latest newsletter, Milky Whey, Mr Norgate said his vision included a dairy industry that had the 
majority of New Zealand dairy farmers as shareholders, was one of a few global food companies, made its profit from 
knowledge and brands, and was an icon all New Zealanders could be proud of. 
He said the company's new share standard proposal was a way to reflect ownership in a value-added cooperative in a 
manner that ensured the cooperative remained a viable ownership structure in the future. 
"Cooperative ownership has been the strength of the New Zealand dairy industry for over 100 years. Our job is to 
continue to derive that strength . . . a further challenge will be the inclusion of shareholders from outside New Zealand. 
"Currently we have contract suppliers to Peters and Brownes [Kiwi's subsidiary in Western Australia] but there is no 
reason why over time they could not become owners in the business in the same way our New Zealand shareholders 
are." 
Farmers would see more about "reinventing the cooperative" over coming months. 
Mr Norgate said New Zealanders were "woefully uninformed" about the $8 billion-plus dairy industry, considering its 
size and its contribution to the economy. 
 
 
  When will the Chinese come back for wool? 
  
  
 
WOOL PRICES have slipped by up to 11 per cent in the latest auctions amid signs that the Chinese, who have been 
dominating recent sales, have stopped buying. 
The sudden disappearance of Chinese buying will be a big disappointment to New Zealand farmers as it has come at a 
bad time, with shearing under way for most of the clip. 
Compounding the problem has been word of layoffs in New Zealand wool-spinning plants. 
This suggests that the long-expected downturn has hit the Australian carpet market after a protracted period of 
buoyancy because of high consumer confidence linked to the Sydney Olympics. 
Exporters say that all is far from gloom; that the European, Indian and other markets are reasonably healthy, suggesting 
prices will be underpinned about current levels. 
However, prices are expected to come under pressure with an average of two auctions a week to be staged in the North 
and South Islands till the end of January. 
There were no sales this week, mainly because it was show week in Canterbury. 
During the past two months the fine-wool indicator has slipped from $16.32 to $16.05 (down 2 per cent), the medium 
from $5.82 to $5.16 (down 11 per cent), and the strong-wool indicator from $4.47 to $4.12 (down 8 per cent). 
The big question remains when the Chinese will be back. They buy under an annual quota set by Beijing bureaucrats, 
and it is believed that this was virtually filled by the middle of last month. 
Some exporters believe they are unlikely to reappear for months, as they have bought so much wool, especially from 
Australia, that the 2001 quota will not be issued till next year. 
Normally the quota is issued about February after the Chinese New Year. 
However, mystery surrounds the Chinese buying. No one knows for certain even if most of the quota has been filled. 
Peter Whiteman of Masurel Fils said: "All we know is that the Chinese would normally have bought when prices 
drifted back at the last sales. 
"Word that the quota seems to have filled quickly went round the market _ and we immediately saw the other buyers, 
the Europeans, Indians and so on, begin to lower their offer prices." 
Mr Whiteman said the Chinese might buy only about a fifth of the New Zealand clip these days, but they remained a 
vital part of the market. 
"They tend to dictate the level of prices, and force the other buyers to follow suit." 
This stop-go situation was extremely difficult for farmers, as well as for exporters, to manage, he said. 
OTHER exporters said that the inability of the Chinese to underpin the auction system at the period of peak production 
suggested prices would remain flat in the coming months. 
Roger Buchanan of the Wool Board said it did appear that the Chinese had used up much of their year-2000 quota and 
this was behind the recent substantial drop in prices. 
"The problem relates to lack of transparency about the way the Chinese handle their quota," he said. 
"It leads to considerable uncertainty and frustration for the New Zealand industry." 
Efforts had been made for years to try to persuade the Chinese authorities to change the system, Mr Buchanan said. 
"When Chinese buyers arrive prices shoot up . . . and when they leave they stumble." 
Mr Buchanan said the Chinese had been big buyers, especially in recent months, of finer crossbred types that are used 
for handknitting. 
In the first nine months of this year, according to Chinese trade figures, they bought 29 per cent more New Zealand 
wool than in 1999. The total stood at 23,000 tonnes (17,900 tonnes for the corresponding period last year). 
However, the Chinese bought far more fine wools from Australia _ 138,000 tonnes (80,000 tonnes). 
This jump in sales meant that the Australians now have a significant exposure to the Chinese market. 
Some exporters believe this leaves them over-exposed to the whims of one buyer _ and that any disruption to the trade 
could cause a big fall in prices. In contrast, New Zealand now has no dominant buyer, which is seen as a healthier 
situation. 
 
 
  Teen imports wool-less sheep 

Matthew Muggeridge shows off his imported wool-less dorper sheep 
  
TEENAGE farming entrepreneur Matthew Muggeridge has branched out into yet another field. 
The Taranaki 16-year-old has imported five dorper sheep from Western Australia, and will participate in AgResearch 
trials crossing the wool-less breed with conventional Romney sheep. 
The dorper was developed in South Africa from black-headed Persian and Dorset horn breeds to produce prime lamb 
and quality mutton in arid regions. 
Matthew is the managing director of Matthew's Farming Company, which began by setting up an animal park on a two-
hectare (five-acre) block on the family farm, south of Opunake, a couple of years ago. It is home to a wide variety of 
animals from guinea pigs and lop-eared rabbits to Jacobian patterned sheep, a Boer goat and a Ponui Island donkey. 
Since then Matthew has developed a reputation for owning some of the more exotic cattle and sheep breeds and has 
clients throughout New Zealand. He has a policy of reinvesting any income and these days has a variety of stock 
including a Boer goat herd, lowline beef cattle, pigs and a llama named Jordie. 
He leases a 16-hectare property near Okato and 2.4 hectares across the road from his home property. He is also 
involved in share-farming ventures in Auckland and Nelson. 
His latest purchases, which he said had cost "in the thousands", would appeal to farmers looking to improve their 
profitability. 
Dorpers produce a fleece of about 400 grams a year that is a mix of hair and wool fibres _ so there is no need to shear 
or crutch. Flystrike is not a problem. Good carcass conformation makes them ideal meat producers. 
"The way the wool industry is going the mid-micron farmers need to go into prime lambs, and this looks a good breed 
to use as a terminal sire. 
"In three or four months the lambs are reaching 36 kilograms live-weight. That's under Australian conditions. I think 
they should do even better over here as long as they can adapt to our climate. They seem to like our grass. Since they've 
been here they've piled on the condition." 
The sheep would be good in drought-prone areas such as Canterbury, he said. _ NZPA 
 
 
  Working groups to look at research, training 
  
THREE working groups of the Meat Board and the Wool Board start work on Monday to find ways to plug holes in 
research and development, the transfer of new technology to farmers and education and training. 
The move follows combined government and industry contributions to research falling from $20 million to just under 
$11 million and the Government indicating that its continued contribution to sheep research will continue to fall. 
The transfer of new information about new animal and farming techniques and technology has also shown a drop since 
the Agriculture Ministry's Maftech division was sold to stock and station interests. 
Woolpro managing director Lance Wiggins said the two boards were putting about $11 million into research and 
development, which was more than the Government was contributing, but it had been recognised that farmers would 
need to take more responsibility for research and training, rather than rely on the Government. 
He said farmers were thirsty for information that would improve their productivity and profitability. A new publication 
on lamb growth had sold out in the first month, and a reprint was under way. 
The projects were being undertaken by the two boards because the Government was not going to be doing it and the 
demand for information from farmers showed that a gap had appeared. 
 
 
  Government backing assured, says farmer 
  
AGRICULTURE Minister Jim Sutton has given assurances that the Government will support what the majority of 
farmers want in any dairy industry restructuring, Dairy Farmers of New Zealand chairman Charlie Pedersen says. 
Mr Pedersen said that as far as he knew there had been no developments on restructuring since the two main companies 
_ Dairy Group and Kiwi Cooperative Dairies _ could not reach an agreement. 
He said there were three options for restructuring: 
* Retain the present system and put New Zealand Dairy Board shares in the hands of farmers. 
* Form a single manufacturing and marketing company with deregulation. 
* Split the Dairy Board between the cooperatives so that they could manufacture and market their own products 
overseas. 
The last option would be the most unpopular with farmers, he said. 
Dairy Farmers of New Zealand planned to ask the main cooperative companies before Christmas what options they 
had, he said. 
Once farmers knew what option the companies favoured, professional consultants could survey dairy farmers. 
"The survey would provide evidence for the Government as to the preferred option of farmers," he said. 
Mr Pedersen said that since MergeCo _ the plan to amalgamate manufacturers Kiwi and Dairy Group with marketer the 
Dairy Board _ had failed in March there was a feeling among farmers and the companies that some work could be done 
to show how a two-company model could work. 
"But we have been unable to find whether this work has been done. My assumption is that it has either not been done, 
or it has been and has shown it to be far too unstable and has too many potential downsides for it to be a serious 
option," he said. 
Some industry sections have been flagging the idea that MergeCo is again a serious option. 
Mr Pedersen said that at Federated Farmers' national council meeting this week he had raised the issue of farmer 
shareholding in the Dairy Board because it was a mechanism that would put the onus on farmers to decide the future of 
the industry. 
Taking the Dairy Board shareholding out of the companies would have the effect of putting the power in the industry 
back in the Dairy Board and, therefore, a single entity, Mr Pedersen said. 
"We spoke to the minister of agriculture about this and his attitude was that if we could show that this was what the 
vast majority of farmers desired, then the Government would support it." 
 
 
  Lambs sell strongly 
  
  
 
SHEEP prices stayed buoyant at Dannevirke yesterday with new season's lambs selling strongly. Prices from 
Wrightson: 
Prime sheep: Lambs $60-$71, 2th ewes $56-$62.50, 4th ewes and over $46-$58. 
Store sheep: Blackface spring lambs $45.30-$66, Telex-Romney spring lambs $40-$57.20, last season's lambs $68. 
 

27 May 2000
 
 Stock prices strong 
  
 
 
CONTINUING good prices attracted huge yardings of store sheep and cattle at key saleyards in the southern North Island this week, 
with more than 20,000 sheep and 4000 cattle sold at Feilding and Stortford Lodge alone. Agents said wintering-over stock levels were 
being reached on many farms at favourable rates after a good autumn. Yesterday's big Feilding lamb yarding saw prices ease back 
slightly. Prices from Wrightson: 


Dumped float some relief for Telecom 
  
 
THE scrapping of Vodafone AirTouch's huge Australasian float has brought some relief to Telecom's plummeting share price with it 
rising 6 cents to $7.73 yesterday. 
The prospect of investors' switching from Telecom and other telecommunications companies to an investment in Vodafone Pacific 
was removed yesterday after the global mobile phone operator dumped plans for a $3.8 billion float and listing on the Australian Stock 
Exchange. 
But market commentators are unsure if the 21 per cent slump in the Telecom price since hitting a year high of $9.82 on April 10 is the 
end of it. 
The "trashing" of Telecom's share price in the past six weeks was part of a global re-rating of telecommunications stocks and Telecom 
appeared to have suffered less than some of its counterparts, they said yesterday. 
Telecommunications companies around the world have seen their values plummet 20 to 40 per cent since mid-March. 
Axa New Zealand chief investment officer Barry Lindsay said: "Telecom's experience is not isolated or specific to them." 
Telstra had suffered similarly to Telecom with a 23 per cent fall from a high of A$8.70 in March. British Telecom had dropped 30 per 
cent to about <>9, Vodafone AirTouch had lost 30 per cent since March highs of <>4, Telecom Mexico had plummeted 40 per cent 
since March and France Telecom was 37 per cent down. 
The telecommunications stocks had fallen far further than the overall markets in each country. Telecom's 21 per cent fall compared 
with only 8 per cent in the NZSE 40 since April 10. The Australian All Ordinaries index had lost ground by 9.5 per cent since mid-
March, but Telstra had fallen 23 per cent. 
On the local front, the telecommunications inquiry had created uncertainty for Telecom. 
Negative internal factors included the drain on Telecom's earnings for the next two to three years from the $1.6 billion investment in 
AAPT. 
Axa NZ was taking the opportunity to "top up" its Telecom holding. Axa had been underweight and was now rebuilding the holding. 
Mr Lindsay said the $9.82 high was probably the best price Telecom would see this year. 
Ord Minnett analyst David Wallace said other factors impacting on the stock price were low earnings growth in the March quarter, 
including a marked slowing in mobile phone growth and big capital expenditure requirements for third generation spectrum. 
Dividends which had previously been high were being reviewed in the light of capital expenditure requirements. The market had been 
disappointed with Telecom's decision to shelve any splitting off and listing of its growth businesses. 
Telecom chief executive Theresa Gattung said at the third-quarter result on May 16 that Telecom would not be rushed into premature 
restructuring when international markets were so volatile.
 
 Surprise olive branch for bosses 
  
 
 
FINANCE MINISTER Michael Cullen offered an olive branch to business leaders in Wellington this week. 
The Government was open to changes in the Employment Relations Bill, Dr Cullen said. 
This may have come as a surprise to businesses which saw the same government ram through the renationalisation of ACC and turned 
its back on any criticism. 
But speaking to the Wellington Chamber of Commerce on Tuesday, Dr Cullen said he recognised that the industrial relations bill was 
a key issue with business. 
The bill was not in its final form and the Employers' Federation had been "quietly working away behind the scenes" and could take 
credit for several changes already, he said. 
There have been 200 submissions on the bill and another 200 more are coming up, with the select committee expected to report back 
to Parliament by June 20. 
Whether business gets the full olive branch of changes or just a couple of leaves remains to be seen. 
But Dr Cullen gave the first sign of compromise from a government that has charged ahead with unpopular changes in an apparent 
attempt to get the bad news out of the way quickly, well before the next election. 
The rapid-fire change to ACC, new industrial law and higher marginal tax rates has rocked business confidence. 
For instance, Canterbury business confidence has slumped dramatically during the past three months, with 41 per cent of more than 
500 business respondents expecting business to decline over the next six months _ double the number from the previous survey. 
Canterbury has been a leading indicator of the national business mood in the past. 
Adding to business concerns, the big banks lifted lending rates from 8.1 per cent to 8.8 per cent this week. There is a fear that once 
again the Reserve Bank has lifted interest rates too much and may choke economic growth. 
ANZ Bank managing director and former Treasury secretary Murray Horn said the impact of the interest rate rises and tax rises were 
starting to slow people's spending on bigger items such as cars and appliances. 
Financing for big items like cars was "definitely off". 
"You can't pin it all on one move, but people are feeling they have less discretionary income," he said. 
The slowdown in the domestic sector had to happen. "You can't keep going with a balance of payments, the size we have it," Dr Horn 
said. 
He agreed there was a mood swing among business people about the economy. 
"I think the mood is getting more pessimistic," he said, even though he didn't make too much of the Canterbury survey which was not 
comprehensive. 
But the Employers and Manufacturers' Association said yesterday it was going into the second quarter with a large drop in turnover, 
with export and domestic turnover down 13 per cent on the same month last year. 
The manufacturers' survey was the most pessimistic for a long time, according to association northern chief executive Alasdair 
Thompson, with higher interest rates and a falling dollar knocking consumer and business confidence. 
Only 38 per cent of those surveyed were working at full capacity, down from 53 per cent in March. 
Staff numbers were up 10 per cent on corresponding period last year, but 17 per cent of firms said they could lay off staff next month. 
It seems some businesses are simply sitting on their hands and waiting to see what happens next, so Labour's changes to the 
employment bill could be vital in restoring confidence apparent just a few months ago. 
While there is growing gloom in the cities, it should not be forgotten that most farmers have had a glorious year after two years of 
drought in some years. Production is up, prices are up and export returns are up. 
Wrightson chief executive Allan Freeth said clients and his company were having a "very good year" and there was not a lot of reason 
for farmers to be pessimistic. 
But farming was an industry that "turned on a dime" he said, mainly because of the weather, so there was an element of caution about 
spending up on new tractors and cars. 
If the next year is another good one, more of the extra cash may find its way into the rest of the rural and provincial economy. 
Some bank economists say that too much weight is on the signs of a cooling domestic economy and not enough on a favourable export 
climate. 
The April trade figures this week show continued strong growth in imports, but more of it is going into capital spending and 
intermediate goods, a good sign for greater domestic production. Buying of consumer goods is slowing down. 
According to ANZ Bank economists, exports are starting to surge and gaining enough momentum to be the engine of growth in the 
next couple of years. 
Export revenues are 17 per cent above levels of a year ago, the fastest annual rise for eight years, with volumes and prices both up. 
At the present rate, export goods could be up $4 billion on the 1999 export base of $22.7 billion. Exports of services are also up with 
more foreign tourists. 
Service exports excluding travel and transport were worth $1.5 billion in 1999, up 55 per cent on 1996. Payments for communications 
insurance, computer services and so on were worth more than threee times the value of the kiwifruit sector. 
The soft dollar will continue and boost export returns, especially for manufacturers. 
World economic growth is still improving, giving a good sales environment and potential for higher prices. 
So one branch of the economy may be wind-burnt, but there are olives on the other side of the tree.
 
 Oil merger cleared 
  
 
BP Oil New Zealand has been cleared by the Commerce Commission to buy Burmah Castrol. The commission concluded that a 
merger would be within the commission's safe harbours for market share in lubricant oils and would face effective competition and not 
deter new competitors.
 
 IT investment 
  
 
Listed venture capital fund IT Capital has acquired 25 per cent of an Australian e-commerce developer, Golden-Orb Technologies in 
Queensland. The investment was subject to final due diligence and documentation, IT Capital managing director Keith Phillips said. 
Golden-Orb would continue developing software that enabled simple construction and management of e-commerce sites.
 
 Casino go-ahead 
  
 
 
Listed casino operator Sky City has been given approval by the South Australian Gaming Supervisory Authority to buy the Adelaide 
casino. Sky City was named as the preferred bidder in February. Approval was a condition of the purchase.
 
 Ravensdown buy 
  
 
 
Ravensdown Fertiliser Cooperative has said it has bought Dipton Lime in Southland, making it one of New Zealand's biggest 
suppliers of agricultural lime. It will take over Dipton next month.
 
 Resort on market 
  
 
 
The problem-plagued Marlborough Ridge Resort near Blenheim is up for international tender as a mortgagee sale. Sixteen residential 
sections and an undeveloped area next to the Marlborough Golf Club are being offered.
 
  
 It's over to you, says judge 
  
 
 
FORCE Corporation and Australian funds manager MTM Funds Management have been told by the High Court in Auckland to 
proceed with plans for an independent architect to determine the date Force's new entertainment centre in downtown Auckland was 
completed. 
This results from legal action brought by MTM last week which claimed that the only remedy for a disputed date of completion was 
through the courts. But Justice Sylvia Cartwright said that the two companies should continue with the plans it started for an 
independent architect to determine the practical completion date. 
Force signed off the building as being completed by December 30, 1999, a deadline date required in a share purchase and loan deed 
for the building. MTM said there was still work to be done and defects to be fixed at that date. 
MTM lent Force $50 million to complete the building. Once signed off by the independent architecht MTM was then to buy it as an 
investment.
 
 Big bank backlash helps us - SBS 
  
 
SOUTHLAND Building Society had a record after-tax profit of $7.7 million, a 41 per cent jump on the year before, gaining more 
mortgage business due to a backlash against the big retail banks, managing director Ross Smith said. 
Rising fees, foreign ownership and branch closures had affected service delivery at the big banks, Mr Smith said. 
Lower interest rates in the year to March 31, 2000, had helped Southland's result. 
Total income fell to $59 million from $71.1 million the year before due to lower interest rate revenue. 
But total expenses also fell to $51.4 million from $65 million the year before because Southland paid out less in dividends on its 
redeemable shares because of lower interest rates. 
The net surplus after tax in the March 1999 year was $5.47 million. 
Mr Smith said Southland's mortgage book had increased 17 per cent to $862 million. 
It was the biggest New Zealand-owned mortgage lender, bigger than TSB Bank. 
Southland was still considering setting up branches in the North Island, but had not signed off on that yet. 
By the end of the year Southland would have introduced banking-type services such as debt cards, cheque facilities, telephone banking 
and a service-based contact centre.
 
 Nine want stats job 
  
 
 
NINE applicants _ all from New Zealand or the Pacific basin _ have applied to replace former government statistician Len Cook, who 
left this month to become national statistician in Britain. 
An appointment is expected to be made within six weeks, according to the State Services Commission. 
In the meantime, deputy government statistician Dianne Macaskill is standing in as acting government statistician.
 
 Govt has put economy into reverse - paper 
  
 
 
THE Labour-led coalition government is determined to undo the economic reforms of the past 15 years and has thrust the economy 
into reverse, according to an editorial in the Asian Wall Street Journal. 
Under a headline "NZ's New Govt Throws The Engine Into Reverse", the conservative financial daily says "the honeymoon is over" 
for Labour. 
"Helen Clarke's [sic] Labour-led government in New Zealand only won power last November, but already she is racing to undo the 
supply-side reforms of the last fifteen years. 
"That has led to a sudden loss of confidence by investors and _ coincidence? _ a 15-year low in the value of the NZ dollar last week." 
Wednesday's editorial says that if Miss Clark (who the Journal consistently refers to as Ms Clarke) pressed ahead with increasing 
labour and insurance costs for New Zealand's employers and raising taxes, the trickle of money leaving could quickly become a flood. 
It says the Government's plan to renationalise ACC is emblematic of the problem. It is incredible it is prepared to undo ACC reform 
which has offered significant savings on premiums to employers on the grounds that some have benefited more than others. 
"It claims that the state is now capable of running the ACC just as efficiently and more equitably than the private sector. That was just 
the beginning of the bad news for companies." 
The Journal also says Miss Clark was repaying her union supporters by enhancing their power in wage talks through the Employment 
Relations Bill, which will increase compliance costs. By forcing employers and employees to accept unions as the representatives of 
the employee side at the bargaining table, it will "turn a fluid labour market into a rigid one". 
It says the soon-to-be repealed Employment Contracts Act has increased labour flexibility and employment and there is less industrial 
action. 
"Now that the unions are back in control, they are crowing." 
The Journal accuses the Government of interfering in the economy in other ways, citing the scuppering of the planned sale of half of 
fishing company Sealord to foreign interests. 
The Clark administration's boast that it would keep the budget deficit under control was based on optimistic forecasts of future growth. 
"In fact, it is increasing spending, and given the decline in business confidence, growth may not turn out to be so easily forthcoming. 
So it will hardly be surprising if New Zealand runs into fiscal problems a couple years from now." 
However, it says there is one possible twist to the currency's fall, flight of foreign capital and interest rate rises that could turn a 
negative into a positive. "The danger of incurring this shock to the economy and capital flight could force Labour to moderate its 
policies." 
It says Miss Clark came to power on the assumption that she would chart a steady course, tacking gently left perhaps, but nonetheless 
keeping New Zealand on track for continued growth. 
"Instead her government appears determined to undo the accomplishments of Roger Douglas and Ruth Richardson, reforms which 
transformed the country's economy in the 1980s and '90s," the editorial says. _ NZPA
 
 Investors block out US slide 
  
FLETCHER Energy stood out as the sharemarket gained a little ground yesterday, ignoring Wall Street's reversal overnight. 
"There wasn't a huge amount of activity but prices were generally better than might have been expected after the Dow fell sharply," 
said Richard Leggat at Merrill Lynch. 
"Fletcher Energy was the star, adding 29 cents or 5.4 per cent to 566. I think this was for a two-fold reason: first, the higher oil price 
overnight and also reports that the restructuring process appeared to be well under way. 
Fletcher Building and Forests were also better, adding 6c to 207 and 3c to 84. 
"Telecom closed higher _ up 6c at 773 _ which again, given the weakness offshore, was a reasonably good effort. But the volume was 
pretty light. There were about 600,000 shares done pre-market and total on the day was 2.1 million," Mr Leggat said. 
The NZSE 40 capital index closed up 9.82 points or 0.5 of a per cent at 1989.26 on moderate total turnover value of $79 million, of 
which Telecom accounted for $16.4 million and Fletcher Energy $7.2 million. 
Gainers outstripped losers by 57 to 36 among the 145 stocks traded. 
Yesterday, Contact Energy took a breather from its strong run, closing off 5c at 278 after meeting resistance around 280, but it was up 
4.9 per cent for the week. Tower continued to grow, up 3c at 558, on takeover speculation. 
Air New Zealand really struggled, Mr Leggat said. "I think falling because of higher oil prices and the weak dollar both of which 
aren't good for near-term earnings." 
Air NZ A shares dipped 1c to 181 and its Bs 9c to 215. Tranz Rail expanded 8c to 288. 
Smaller companies were firmer, with their capital index rising 5.89 points or 0.12 of a per cent to 4882.28. 

 
 Kiwi swings south 
  
 
 
THE dollar ended a quarter of a US cent lower yesterday at US45.33c, from Thursday's close at US45.58c. 
The Kiwi traded in light flows, a currency dealer said. 
"There was growing interest around the US45.25-30c level and slowing interest around US45.65-70c." 
Another forex dealer said the Kiwi had followed the aussie on a gradual downward slide, but said the market had lost some of its 
nervousness. 
"But not many people want to jump in too much _ they're just covering their stuff. Not many people are holding (currency) at the 
moment." 
The Australian dollar was down at US56.82c (US57.26c Thursday). 
On the crosses, the Kiwi was up against the aussie at A79.78c (A79.60c) but down against other key currencies at 48.82 yen (49.09), 
30.77 pence (30.91), 0.9744 marks (0.9858), 0.7758 Swiss francs (0.7850), and 0.4968 euro (0.5037). 
The trade-weighted index fell from 51.75 at Thursday's closing to 51.45 and though the 90-day bill yields gained one basis point to 
6.92 per cent, the monetary conditions eased with the index at minus 528 (minus 497). 
In the bond market, prices were up to three basis points stronger at the short-dated end and between five and eight better at the long 
end. 
Among the bonds, the February 2001s were at 7.11 per cent (7.08), April 2003s at 7.24 per cent (7.25), November 2006s at 7.12 per 
cent (7.17), and November 2011s at 7.01 per cent (7.09). 
In New York overnight, US treasuries surged as investors headed out of the sharemarket for safer bonds. 
Meanwhile, the aussie was back above US57c at the close of Australian trading yesterday, after spending most of the session below 
the figure. 
AMP Asset Management senior portfolio manager Chris Loong said the aussie rose to its session high of US$0.5710 in the tracks of 
the euro late in the day. 
"The Aussie has tracked the euro relatively closely in the last couple of months, so that helped drag the aussie up. 
"Probably also, (it was) covering of the short positions that had pushed the Aussie down in the previous 24 hours." 
At 5pm Sydney time, the Australian dollar was at US$0.5704/09, from 0.5684/89 Thursday. 
"I think the market would be wary of pushing the Aussie too far," Mr Loong said. "There's likely to be sellers coming in around 
US$0.5770, and we're talking technical resistance around US$0.5780." 
Softer data this week added to expectations that the Reserve Bank of Australia will not raise rates when it meets next month. 
Next week boasts a long list of data releases that may shed more light on the monetary policy outlook. _ NZPA-AAP
 
19 Oct 2000 

 
  Rural exports boom as dollar falls again 
  
THE dollar hit another low yesterday at close to US39 cents, but farmers and exporters are seeing the benefits roll through. 
Knocked again by falls in the Australian dollar and the euro, the dollar slid to US39.25c early yesterday before edging back to 
US39.4c by the end of the day. 
But the rural sector is booming, with the Agriculture Ministry forecasting three good export years ahead for every product except 
apples. 
The ministry said in its latest situation outlook report that its projections to 2004 were based on improving world market growth 
prospects, and the low value of the New Zealand dollar which makes our exports more attractive to international customers. 
Agriculture Minister Jim Sutton said yesterday that the ministry's forecasts were based on an exchange rate outlook as at August 1 of 
US48c for the year ending March 2001 and a slow appreciation from then on. But the dollar had since slipped to around US39c, 
meaning even higher potential earnings for exporters in the short-term at least. 
Also yesterday, forest products giant Carter Holt Harvey tripled its half-year profits to $176 million, in part boosted by the lower 
dollar. 
A 1c fall in the exchange rate can boost Carter Holt's profits by $9 million over a year. 
The MAF report predicts meat export earnings will rise from $3.19 billion this year to $3.52 billion in 2004, and dairy exports will rise 
by nearly $2 billion to $6.08 billion. 
Forestry is also tipped for a big earnings rise _ from $2.93 billion this year to $4.22 billion in three years. 
Even wool, the poor cousin of the pastoral family, was set to increase export returns, from $0.76 billion this year to to an estimated 
$0.85 billion in 2004. 
But for already cash-strapped apple growers the report was no comfort. Apple export earnings are forecast to fall from $480 million 
this year to $426 million in three years. 
Kiwifruit earnings should rise from $467 million to $528 million, and the export value of other horticultural products should rise from 
$806 million to $963 million in 2004, the ministry said. 
There have been predictions that retail prices will rise again because of higher import costs and the increased cost of fuel. Consumer 
inflation hit a five-year high of 3 per cent in the year to September, according to figures out on Monday. 
But Associate Finance Minister Trevor Mallard said yesterday that competitive pressures in the retail sector would limit price rises. 
"There are strong competitive pressures," he told Parliament. 
 
Steers fetch bumper price 
  
STRONG store cattle prices dominated Stortford Lodge yesterday with what is believed to be a record $1112 being paid for yearling 
steers. Prices from L I Redshaw: 

Axa expected to merge units 
  
AXA Pacific Holdings was expected to announce on Monday that the Asia Pacific arm would be merged with Alliance Capital 
Management, sharebrokers said yesterday. 
Axa New Zealand has called a press conference for Monday. 
Alliance Capital Management is a partly owned subsidiary of United States-based parent Axa Financial, which in turn is owned by 
French-based Axa SA. 
Australian media reports said it was understood that the combined investment management operation would come under Axa New 
Zealand's present head of investment management operations, Michael Bargholz. 
Alliance's head of Australian equities, Don Low, was tipped to lead the combined Australian equities operation. 
 
 
  Carter's full-year outlook brightens 
  
 
CARTER Holt Harvey's full-year profits are likely to be "closer to $400 million than $300 million", even with a tougher second half-
year in prospect, according to analysts. 
Despite its best first-half profit in five years, of $176 million in the six months to September, Carter Holt shares ended the day at 
$1.63, unchanged, with analysts taking a cautious view of prospects. 
The price was unaffected by CHH plans to set up an employee trust to buy about 34 million CHH shares _ 2 per cent of shares on 
issue. 
The company posted an improved dividend of 4 cents a share, up from 3c a year ago but said the outlook for the second half looked 
"tougher" than the first six months. 
The dividend in the second half would depend "enormously" on the level of earnings in that half-year, chief executive Chris Liddell 
said. 
The profit was close to the average forecast of $182 million and well up on last year's $56 million. 
The first and second quarters of the year were strong, boosted by bouyant pulp and paper markets, with lower costs and the benefits of 
a lower New Zealand dollar, according to Deutsche Securities analyst David Stanley. 
"They are good results, but the consensus expectations for the second quarter were for an even better number (than $86 million)," he 
said. 
The full-year profit would be closer to $400 million than $300 million, he said. Before the result the consensus market forecast was for 
a full-year profit of $350 million, with a top forecast of $393 million. 
The second-quarter profit was down a bit on the first quarter's $90 million because there was some pulp and paper plant down time 
and CHH bought more trees from outside and cut fewer of its own trees, with a smaller margin. 
The benefits of a low dollar should flow through in the second half, offsetting weakness in some markets. 
A US1c fall in the exchange rate boosts CHH's profits by $9 million over a year. In the first half, CHH's average exchange rate was 
US50c against US39.4c yesterday. 
"Over the next six months we'll be getting a more beneficial exchange rate," Mr Liddell said. "Assuming the spot rate stays where it is 
now that will flow through to next year as well", offseting any weakness in commodity prices. 
The outlook for the rest of the financial year was mixed, with Asian markets looking generally positive and a fundamentally strong 
Australian market, though it had been affected by the fall in the dollar and the post-Olympic slowdown. 
The New Zealand economy was weaker with low confidence and a tough level of house construction, though some exporters were 
doing well. 
"It is a mixed environment _ the next six months will probably be tougher than the past six months," Mr Liddell said. 
Half-year sales of $1.9 billion were an all time record, up 26 per cent. 
Forest business sales in the second quarter were similar to the first quarter, Mr Liddell said, but prices were tough and well below the 
long-term trend. 
"We saw an uptick in log exports, back to 400,000 to 450,000 tonnes a quarter, which we think is the level we'd like to achieve," he 
said. 
Operating earnings for the forests business were $40 million for the quarter and $90 million for the half-year _ so down between 
quarters, 
In wood products, earnings before interest and tax more than doubled to $56 million from $25 million the previous period. That 
included five months from the Australian CSR wood processing business. 
But CHH was not ready to spend more of its $2.7 billion from the sale of Chilean company Copec, before bedding down recently 
acquired businesses. 
Timber operations were hit in the second quarter by weaker Australian and New Zealand construction markets. 
Australian markets would probably bounce with an underlying degree of confidence and strength that should pull it through. 
"New Zealand is a little harder to tell," he said. 
In the pulp and paper business, export pulp and linerboard prices were strong, for the quarter and the six months with earnings before 
interest and tax of $79 million from $5 million. 
 
 
Speculation surrounds Telecom and Optus 
   
 
TELECOM might be a potential investor in the mobile business of Australia's No 2 telecommunications company Cable and Wireless 
Optus, but it would be one of several contenders, analysts said yesterday. 
There were also questions about how Telecom would fund it as it had taken on $2 billion of new debt with the AAPT takeover, 
analysts said after the Australian Financial Review reported Telecom in conjunction with Japanese giant NTT DoCoMo was a leading 
contender to invest in the mobile business. 
Telecom shares jumped 21 cents yesterday to $5.50 on the speculation. 
A Telecom spokeswoman said the story was speculation and if there was something shareholders or the Stock Exchange should be 
told Telecom would do that. 
Telecom also reported that its offer for the remaining 20 per cent of AAPT had gone unconditional with it securing 90 per cent of the 
shares. The offer was open till October 28. 
The media report said Optus was accelerating the breakup of its $20 billion-plus Australian operations and had set Friday as a deadline 
for formal expressions of interest. Optus did not deny the Friday deadline yesterday but said the completion of a review of its 
businesses was still some months away. 
Optus's three businesses are mobile, data and business, and consumer and multi-media. 
The report said Telecom would take 40 per cent, DoCoMo 20 per cent and the balance would be sold in a public float of the mobile 
business. 
An analyst said Telecom might end up with a stake in a big trans-Tasman mobile business that combined the assets of Optus, Telecom 
and its subsidiary AAPT. 
Telecom could fund its stake by selling its and AAPT's mobile businesses into the new entity that would be publicly floated. That was 
more likely than Telecom trying to raise the full amount through an equity issue. But the analyst said it was still speculation whether 
that sort of deal was acceptable to Optus which had indicated it preferred to keep a stake in the businesses that were split off. 
Telecom would have to present a pretty convincing case to the market to raise substantial new equity to get support for that 
considering the weak state of its share price, the analyst said. 
"That sort of thing would vault Telecom up the ladder somewhat so they [the market] might be supportive." 
There was just as strong a likelihood that other parties were interested and the talk about Kerry Packer being interested in the media 
assets was close to the market in his view, though Packer might be interested in the mobile business as well. 
Another scenario was for Telecom and AAPT to combine with the smaller mobile player Hutchison and that had been speculated on 
also. 
Optus's mobile business is strong and has been considered to be worth more than $12 billion. It has a 33 per cent market share and 
brought in $1.7 billion in revenue in the March 2000 year. It had an earnings before interest, tax, depreciation and amortisation margin 
of 46 per cent. 
By comparison Telecom's cellular and mobile business is about one third the size _ achieving $546 million revenue in the year to 
June. 
Two weeks ago Telecom chief executive Theresa Gattung told The Dominion "there might well be opportunities in the Australian 
market, potential rationalisations. But there is nothing pending." 
Asked if Telecom could be a potential investor in one of the Optus businesses Ms Gattung said "possibly" . 
"It's not clear what businesses they're going to keep, what they're going to retain, and what's for sale." 
Another analyst said Telecom would be running its eye over all Optus's assets. He expected some equity-raising exercise to fund that 
because it could not all be debt funded. 
 
 
Scott lifts full-year 
  
 
Scott Technology has posted a $3.57 million profit, up 24 per cent, for the year to August. However, it said the levelling of economic 
activity in many of its international markets indicates that plant renewal and replacement in the appliance industry would be 
constrained during the next several months. 
 
 
Merger unlikely 
  
  
 
Shareholders of a neighbouring power company have virtually dismissed any chance of a merger with Marlborough Lines. Network 
Tasman Trust chairman Peter Malone said he had not been impressed with the relationship between Marlborough Lines and its 
customers, and did not want that to upset the situation Network Tasman had in Nelson. 
 
 
Deed amended 
   
 
UnitedNetworks said yesterday that it had entered into a restated and amended cornerstone relationship deed with key shareholder 
Utilicorp United. Utilicorp had given a commitment to maintain its stake to at least 35 per cent of UnitedNetworks. 
 
 
Bank props aussie 
:  
  
 
The Reserve Bank of Australia bought about A$506 million (NZ$676 million) in the foreign exchange market during September, its 
first official buying intervention in two years. However, the aussie has remained weak, hitting a new all-time low of US$0.5213 
yesterday. 
 
 
AAPT buys in 
  
 
Telecom subsidiary AAPT will join the Seven Network as a shareholder in Evolution Technologies (Australia) with a 12.5 per cent 
stake in the technology company. 
 
 
Aging Asia `a land of opportunity for NZ exporters' 
  
 
EXPORTERS should forget the notion that Asia is a market of young people, according to an Asian expert. 
Its populations are aging, and older people have more to spend, especially if they are well educated, urbanised, with the kids off their 
hands and more leisure time. 
At an Asia 2000 Foundation seminar in Auckland this week, Asian Demographics managing director Clint Laurent explained why 
youth consumer brands like Coca-Cola have a tougher time than they expect in the region, but said exporters had could still prosper. 
Asian households would spend an extra US$600 billion (NZ$1538 billion) on goods and services by 2008, he said. At present, Asian 
households spend $2390 billion a year. 
Dr Laurent said most Asian economies would grow by between 3 per cent and 7 per cent a year for the next decade. 
An Asian resident since 1976, he said he was "extremely bullish" about Asian economies, most of which were recovering from their 
1997 crisis and were heading for another tiger period. 
Enormous sociological change through education, aging populations and income trends presented big market opportunities for New 
Zealanders, he said. 
The Asian emphasis on education was best illustrated by Taiwan which had put 5 per cent of its gross domestic product into education 
each year for the past five years. 
"Education is the muscle behind the economic development. It has created urbanisation." 
It had also created productivity and a new affluent white collar class. White collar workers would grow by 72.6 million in the next 
decade, and they would need chairs, desks, staplers, PCs, and training _ fertile ground for New Zealand exporters. 
"But Asia is not young. Asia is middle aged, going to old. Over 50 per cent of Japan's population is over 50, and the average age in 
Hong Kong is 40. Forget the youth market. It is shrinking by 1 per cent per annum." 
This meant populations with more money, more income and more time. The marginal household dollar was no longer consumed by 
basic food, clothing and shelter needs in many economies. In Japan, the world's second-biggest economy, 70 per cent of income was 
spent on items other than basics. 
"This has led to an enormous shift in consumption patterns. New markets are there that didn't exist a year ago." 
Spending by an emerging middle class on travel, education, health, transport and communications was expected to grow by up to 5 per 
cent a year. Asians were spending more on decor, furnishings and home improvements, and a booming credit industry was emerging, 
fed by young, educated, affluent households. 
Dr Laurent said his key message was that education was responsible for the trends and "education is not stopping". 
With the five to 17-year-old population declining, the education standard would shift from quantity to quality. 
Urbanisation would continue. 
In the next 20 years, 50,000 people a day would become urban residents _ the equivalent of 100 more Hong Kongs would be created. 
The pressure on infrastructure would be great _ another opportunity for New Zealand business. 
The 40- to 59-year-old age bracket would increase by 3 per cent a year over the next decade in affluent Asian countries such as 
Taiwan, Singapore, Hong Kong, and South Korea. 
By 2020 the majority of people in these economies would be more than 40 years old. 
Many of them would be smokers, offering big opportunities for New Zealand health product makers such as Fisher & Paykel. 
Japan's 50 million households spent an average of US$35,000 a year. They earned much more than that but saved half of their income. 
Hong Kong households spent US$26,000 and Singapore, Taiwan and South Korea homes US$24,000. 
Malaysia was the country to watch. It would leap forward and join the other tigers, Dr Laurent said. 
The Philippines had a huge population but not the sort of household money to buy New Zealand quality goods. Exporters should steer 
clear of Indonesia because of its political problems. 
The key household expenditure figure for New Zealand businesses to keep in mind was US$30,000. 
At this level and above, households would be shopping for insurance, Nike trainers, technology, niche market food, and overseas 
holidays. 
He suggested exporters eye "extremely well-fed" Asians such as Singaporeans. They liked to experiment with food, creating 
opportunities for specialist food exports. 
 
 
Key Baycorp stake sold by Bidwill 
  
 
ONE key shareholder of financial information company Baycorp sold 9 per cent of the company's stock yesterday morning. 
Baycorp said 7.26 per cent of the holding belonged to retired director Charles Bidwill, with the rest sold by family and affiliates. 
JB Were adviser John Cobb said his brokerage sold 7.6 million shares at $11.90 to local institutions and private buyers. 
The price was a small discount to the market price. _ NZPA 
 
 
Provincial bid for hi-tech development 

From left, Southland District Mayor Frana Cardno, Local Government Minister Sandra Lee, New Plymouth Mayor Claire Stewart, 
Prime Minister Helen Clark and Far North Mayor Yvonne Sharp sign an agreement for joint regional development 
  
THREE rural districts have formed an economic alliance to promote growth and business development with the help of technology. 
Businesses in each region will use their combined clout to drive new business initiatives previously restricted by isolation and not 
having the scale to attract financial backing. 
The move will eventually embrace e-procurement partnerships between small to medium and even bigger businesses for raw material 
supplies, borrowing, and providing management systems, as well as clusters of like-minded businesses to push into export markets 
with high-value products. 
The alliance also aims to provide a united lobby for provincial New Zealand. Other regions are expected to follow the lead. 
The idea was first mooted by Far North Mayor Yvonne Sharp after reviewing research and strategies of the Far North Development 
Trust. 
Ms Sharp said geographic partnerships were crucial in isolated districts such as Northland but technological advances also supported 
relationships based on common interest, regardless of where parties were. 
All three regions have embarked on long-term strategies to attract industry, focusing on job-intensive sectors such as call centres and 
tele-services. 
 
 
Takeover exemptions needed `pretty quickly' 
  
COMPANY cash issues and other sharemarket activities would be disrupted if class exemptions to the Government's takeovers code 
were not finalised well before the code is introduced on July 1 next year, according to Chapman Tripp principal specialising in 
securities law Frank McLaughlin. 
This was particularly important given the final code confirmed this week was more inflexible than necessary. 
"So they need to get the class exemptions out as soon as possible because they will affect everyday commercial transactions" Mr 
McLaughlin said. 
"In Australia the exemptions are part of the code itself, but that's not the way New Zealand has gone. 
"So they need to decide on the class exemptions pretty quickly if people are to prepare for it during the transition period." 
The takeovers panel is completing further work on class exemptions for groups who inadvertently breach the code's key rule triggering 
full takeover bids when investors exceed a 20 per cent shareholding in target companies. 
Commerce Minister Paul Swain said this week he was confident the panel would finalise exemption details in sufficient time for the 
investment community to prepare for the code. 
Exemptions might apply for court-approved mergers of companies that end up owning more than a combined 20 per cent of another 
company; proxies giving someone more than 20 per cent of the voting rights of a target company; beneficiaries of wills breaching the 
threshold; and shareholders taking shares in lieu of dividends or taking up entitlements to rights issues. 
Mr McLaughlin said the code was being inflexible by not allowing for "creeping" acquisitions by investors holding between 20 per 
cent and 50 per cent of companies. 
"I think the creep rule is inflexible because it would not offend the objectives of the code [to allow creeping acquisitions]," Mr 
McLaughlin said. 
 
 
Electricity `runt' posts good result 
  
  
 
STATE-OWNED Genesis Power, once considered the runt of the state-owned electricity companies, has posted a profit of $48.2 
million for the year to June and captured 15 per cent generation market share. 
That is higher than sister SOE Mighty River Power, which reported a lower-than-targeted profit of $41.3 million and generated 13 per 
cent of New Zealand's electricity needs. 
Low rainfall into Lake Taupo cut Mighty River's production back by 10 per cent. 
But that worked in favour of the 1000 megawatt Huntly thermal station owned by Genesis and run on gas or coal. 
It achieved the $48.2 million after-tax profit from sales of $455 million for the June 2000 year. It has paid the Government a total of 
$11.4 million in dividends, $4.4 million in March and $7 million in September. 
Chief executive Murray Jackson said Genesis had performed creditably in an industry that had undergone substantial transformation in 
the past 18 months. 
The company had exceeded targets across all key areas including market share, customer acquisition, operating profit and plant 
availability. 
The result had established a benchmark for the company "from which I am confident we can grow as a respected and reliable low-cost 
generator and retailer of energy". 
The company had current debt to debt plus equity of around 10 per cent and was well placed to secure business opportunities as they 
arose. 
The Government's equity in the business has increased by $206.5 million to $802 million after a revaluation completed in March this 
year. Total assets now stood at $992 million. 
Genesis had increased its retail business by 16,000 customers to 172,000. 
 
 
  Parallel imports backdown could scuttle cinemas 
  
A FIVE-SCREEN cinema earmarked for Upper Hutt _ in the heart of Commerce Minister Paul Swain's Rimutaka electorate _ could 
be among the casualties of a suggested Government backdown on banning parallel imports, according to a leading film distributor. 
Labour promised before the election to ban parallel imports of films, books, videos and compact discs for two years after they were 
released. 
However, Commerce Ministry officials were now putting pressure on Mr Swain to narrow that "window" to three months, Timothy 
Ord, managing director of film distributor United International Pictures, said yesterday. 
With the increasing popularity of DVD (digital versatile disc) players, many people were hiring parallel imported movies _ copies 
brought in outside-normal-licensing arrangements _ before they had been appeared in cinemas. 
Cinema operators and film distributors have argued that parallel imports of movies on DVDs should be banned for at least nine 
months after movies are first shown in the United States. 
That would give them enough time to buy in the cheaper used film prints from the United States, which are distributed to small-town 
and regional cinemas in New Zealand. 
"UIP's concern is the Government has led the industry to believe it was in favour of a reasonable window to allow the sensible 
marketing of films in New Zealand, particularly to provincial cities and towns," Mr Ord aid. 
"But the whole thing has now possibly been hijacked by the bureaucrats in a classic example of Yes, Minister." 
The sharply lower New Zealand dollar meant the viability of UIP's distribution depended on using the low-cost _ $500 _ used prints 
from the United States. 
"If we were forced to release new expensive $4000 to $5000 prints to counter DVD parallel importing, the effect would be disastrous 
for provincial and country New Zealand. It would also have an adverse effect on most suburban cinemas as well." 
It would turn provincial cinemas into "poor relations of Queen Street", jeopardising their existence. 
And squeezing the parallel importing ban to three months after a film was released would raise doubts about the viability of the 
multiplex cinema proposed for Upper Hutt in Mr Swain's own electorate, Mr Ord said. 
"It would no longer be economically feasible for UIP to supply simultaneously with Lower Hutt, so the new theatre would almost 
certainly not be viable." 
Parallel importing was legalised by the National government, making New Zealand one of few countries to allow the practice, and 
attracting diplomatic sanctions from the United States. 
A spokeswoman for Mr Swain aid yesterday a Government decision was "some way off" and that there was no firm view on the 
length of the parallel importing ban after the release of the originals. 
"I don't know of any specific time periods." 
The Government's speech from the throne late last year had referred to a ban of "up to two years" rather than a flat two years, she said. 
It is understood the Economic Development Ministry has several issues still to settle with Mr Swain. 
 
 
Pohokura looks more promising 
  
FLETCHER Energy says its latest appraisal of its coastal Pohokura discovery in Taranaki increased its confidence in reserve 
estimates, though it has not changed them. 
"Preparations are under way for a 3D seismic survey to be conducted at the end of this year, and for a third well to be drilled to test the 
southern extent of the field in early 2001," the company said in its September-quarter production report issued today. 
"While no adjustments have been made to the booked reserves, statistical confidence in the probable reserves profile is increasing." 
Fletcher Energy estimates proven reserves _ where there is a 90 per cent confidence behind the figure _ at 392 billion cubic feet of gas 
and 17 million barrels of condensate. 
Fletcher Energy said gas production in Canada was up 11 per cent on the 1999 quarter, Canadian oil production rose 5 per cent, and 
Maui oil production increased 13 per cent over the previous June quarter as contributions from the Maui BD oil development began. _ 
NZPA 
 
 
  Better for skiers says Turoa hopeful 
   
 
WELLINGTON'S new stadium, Super 12 rugby and Pacific islands were competitors in attracting skiers to North Island slopes, 
Ruapehu Alpine Lift general manager Dave Mazey said yesterday. 
RAL began yesterday its third bid to convince the Commerce Commission in Wellington to allow it to buy rival skifield Turoa. 
The Commerce Commission has twice turned down RAL's application to buy Turoa, which has been trading in receivership this 
winter. 
At issue was whether the merged company _ which would dominate the North Island ski industry _ would be more beneficial to skiers 
than two independent operators. 
The commission's initial view was that the disadvantages of RAL's owning both fields would outweigh the benefits of a takeover. 
The commission convened a two-day conference to gather more information about RAL's application. 
In his submission yesterday, Mr Mazey stressed the ability to offer seamless lift passes, a proposed guided traverse between the 
resorts, more productive use of the ski areas for development of specialist activities like snow boarding and the ability to maximise ski 
days. 
The weather at Ruapehu was less predictable than that of South Island fields. That meant pricing and the development of services was 
driven by the need to maximise the available days and extending the season. 
"We need to get more people skiing or get them skiing more often." 
South Island fields were targeting the Auckland market with package deals and people travelled more freely between the islands. 
"A large component of our customer base ski both at Ruapehu and in the South Island," Mr Mazey said. 
RAL was also competing against other leisure activities and destinations. The Super 12 rugby competition had taken about $21 million 
out of the North Island leisure market, he said. 
A 10-game season pass at Wellington's stadium costs about $200 compared with a season skiing pass for a similar number of days of 
between $600 and $700, he said. 
During the Ruapehu eruptions in 1995 and 1996 many would-be skiers took winter holidays on Pacific islands, Mr Mazey said. 
RAL's mainly North Island customer were constantly demanding better services and value for money, which was driving development 
of the business. 
Mr Mazey cited snow-making machinery, detachable chairlifts and flush toilets as examples of developments undertaken to encourage 
more skiers. 
 
 
Booming IT firm busts out all over 
  
  
 
CHRISTCHURCH may have lost the Motorola plant but local network router and switching designer and developer Allied Telesyn 
Research says business is booming. 
ATR's engineering director, Geoff Peck, announced the expansion of the firm's high-tech research centre this week. 
ATR will officially open its new building next week, which in turn will be duplicated before next August, allowing staff numbers to 
grow to 250. 
IT staff, overwhelmingly engineers, numbered 27 in January and will soon increase to 90 when 15 graduate engineers arrive after 
university examinations. 
ATR designs and develops routers and other advanced products for linking computer networks. The products are manufactured in 
Singapore. 
The company is using the Internet to recruit New Zealanders overseas who are interested in returning home. The buildings alone are 
an investment of $10 million in Christchurch. 
The first building includes a room with no metal above waist height, for testing products to meet world electro-magnetic radiation 
standards. The second building will include a swimming pool and gymnasium. 
All this is being done without any of the the Government and Christchurch City Council help offered to Motorola, which chose 
Australia over Christchurch for its software centre. 
ATR had its origins in the former DSIR in the late 1970s, developing an early router to link researchers around New Zealand to 
mainframe computers in Wellington. 
The section was privatised as Network Dynamics and owned by Securicor of Britain, and Teltrend of the United States, before 
Japanese-based customer Allied Telesys KK bought it last year. 
Meeting its staffing targets will give ATR more engineers than Tait Electronics in Christchurch, and make it of similar size to the 
city's Trimble Navigation New Zealand, which employs about 200 people, mainly software engineers and specialists. 
ATR's role is to provide engineering design services to the international group owned by Allied Telesis Group. 
The group's other research sites are at Sunnyvale (Silicon Valley), Seattle, Singapore, Tokyo, and Milan. ATG was founded in Japan 
by Takayoshi Oshima and till this year was privately owned. It floated on the Tokyo Stock Exchange in July at NZ$171.50 a share, 
and the shares are now trading above NZ$200. _ NZPA 
 
 
Carter Holt goes for eCargo 
  
  
 
CARTER Holt Harvey announced its venture capital fund's first investment, a $660,000 investment for a 49 per cent share in New 
Zealand's "ground breaking", online freight hub, eCargo Ltd. 
eCargo.co.nz is New Zealand's first freight matching hub. 
CHH would be both an investor and a customer of eCargo and would channel some of its freight business through the new operation, 
Carter Holt chief executive Chris Liddell said yesterday. 
Customers needing goods and freight delivered, visit the eCargo site and register the job. This was matched to transport and freight 
operators who have registered on the site and are available. 
After an online tender, the customer selects who they want to move the job and operators are notified via text messaging or email 
during the tender process. 
CHH will use eCargo immediately for its non-contract road freight requirements. 
eCargo was an example of Carter Holt's "ideas to business" programme, which generated more than 500 ideas. 
 
 
Having your say may be just a click away, says election.com 
  
  
  
 
IF STEPHEN KILPATRICK has his way, voters at the next election will be clicking on a mouse instead of dropping paper in a ballot 
box. 
Another election out he could see people voting from home on their PC or television, cellphone or whatever electronic device suits. 
The managing director of the Christchurch-based branch of the United States online elections company, election.com 
(www.election.com) was in Auckland this week for the launch of the company's first New Zealand Internet election at Auckland's 
University of Technology. 
Up to 15,000 students could vote for their new president online, either on campus laptops, university PCs or from their home computer 
by logging on at the company's Internet site. 
Mr Kilpatrick said it would be possible to have the next general election online though it would require a change to the Electoral Act. 
He would be talking up the issue with recently appointed chief electoral officer David Henry. And the company had been making 
submissions to parliament's justice and electoral and health select committees. 
Internet voting would need a different definition for a polling place which till now has meant a physical location. Ballot papers and 
ballot boxes would have to be written out. 
Election.com has conducted online elections in the United States for organisations such as the United Nations, and recently conducted 
the US's first legally binding election, the Arizona Democrats presidential primary. 
There was a lot of work to do but he said New Zealand could be online for the 2002 elections. At the very least he was hopeful 
election.com could have some participation. 
The company's hardware is centrally based off its New York-based server. 
In the Arizona elections, each voter registered on the electoral roll received a mailed PIN number before the election along with details 
of time and method of voting on the Internet. Two other personal ID's were required to verify the voter's identity. 
Once matched with the electronic registration it was deactivated to prevent multiple voting. 
 
 
Porn worse than virus attack, says software expert 
  
PORNOGRAPHY on the Internet is surpassing e-mail viruses as the biggest technology threat to business, visiting Australia software 
expert Alan Schaverien says. 
The Asia Pacific managing director of Content Technologies, Mr Schaverien said it was commonplace for staff to e-mail pornography 
at work. He said international research showed that 79 per cent of employers had found abuse of their systems. 
"Managers worldwide have been concentrating on the dangers of computer viruses," he said. 
"E-mailing pornography had a corrosive effect inside an organisation and exposes it to the risk of external damage as well." 
Staff exposed to unsolicited e-mails could take a company to court for sexual harassment or failure to provide a safe workplace, 
damaging the company's image, Mr Schaverien said. 
But at the coal face what was worse was the amount of time wasted by staff who stopped work to look at pornography. 
Mr Scaverien was in New Zealand to introduce his firm's new software designed to block unacceptable images being e-mailed into or 
out of company networks. 
Called PORNsweeper, it works on the premise that pornographic images contain more skin pixels than other images. The software 
will allow, however, acceptable images such as corporate profile shots. 
The software can determine the ratio of face skin pixels to the rest of the picture. This determines the size of the image and the amount 
of body in the picture. Technology determined how much of the image was exposed skin. 
Mr Schaverien said companies needed to clearly state their policies on workplace e-mail usage, and unacceptable images were a 
necessary component of content security. 
But he said there was not much chance of the Internal Affairs Department's censorship compliance unit helping out, as it concentrated 
on tracking down trade in child pornography. 
Police spokesman Russell Pilcher said that though police did get calls from companies to help track down the source of pornographic 
material, police saw pornography in the workplace as an industrial realations issue. 
 
 
Sky City expands rewards for loyalty 
   
 
AUCKLAND casino company Sky City has developed a unique loyalty programme for its expanded casino empire. 
Sky City has expanded from its core Auckland base this year to Australia, following the purchase of the Adelaide casino, and from 
December will also have a holding in a new casino in Queenstown. 
It has revamped its loyalty programme to take account of the growing business. Under the old scheme, points accumulated from 
money spent on the gaming machines were able to be redeemed on shops in the Sky City complex. 
The new scheme allows punters to accumulate points from the group's 12 restaurants, bars, and gaming tables as well as the machines. 
The points can be used to pay for restaurant meals, bars, car-parking, and other services. 
Sky City spokeswoman Delwyn Lewer said the loyalty scheme was likely to cost millions but it was already paying dividends. 
The scheme allowed the company's marketing team to build profiles, and target its marketing. 
Melbourne-based company Loyalty Magic had developed a unique system for Sky City, and it was the only casino company in the 
world with such a system, she said. 
 
 
  Kiwis lead Aussies as Internet users
 
NEW ZEALAND is leading Australia in the use of the Internet in business, according to a survey issued by the Government 
yesterday. 
But it found that though Net use was high businesses had yet to fully understand the commercial opportunities and impacts that e-
commerce would bring to the economy and their own business activities. 
However, in nearly all cases e-commerce was seen to be important in developing the customer base, information gathering and 
research, and keeping ahead of competitors. 
The survey found that 68 per cent of all New Zealand firms used the Internet, compared with 57 per cent of Australian firms. 
Thirty three per cent of New Zealand businesses had domain names compared with 28 per cent in Australia. And only 8 per cent of the 
firms surveyed in New Zealand said they didn't have a computer compared with 15 per cent in Australia. 
The survey of 506 small, medium and large businesses, was commissioned by the Economic Development Ministry to provide 
background information for the Government's e-commerce strategy. BRC Marketing and Social Research did a phone survey of 506 
respondents between August 25 and 30 for comparison with corresponding figures collated from 1500 businesses by the Australian 
National Office for the Information Economy in February. 
Because of the time lag in the surveys the research company added another 10 per cent growth to Australian figures based on growth 
projections across the Tasman. The margin of error for total results in New Zealand was plus or minus 5.8 per cent. 
Information Technology Minister Paul Swain said yesterday that the survey's exposure of a lack of understanding of the opportunities 
of e-commerce made the need for the Government's e-commerce summit in two weeks' time all the more important. 
He said there was a need for more research and information on the development of an e-commerce strategy. 
The survey also found that use of e-mail by large firms in both countries is nearing saturation. 
Those surveyed covered a wide range of business from manufacturing (19 per cent of respondents), to construction (8 per cent), the 
primary sector (2 per cent) and business services (13 per cent). 
Main centres represented 58 per cent of respondents, compared with 42 per cent in provincial and rural areas. 
Nearly one in four (23 per cent) of the firms surveyed were involved to some extent with the export of goods or services _ the larger 
firms more likely to be in this category. 
Both Australian and New Zealand results were consistent in showing that larger firms were well ahead of their smaller counterparts in 
the use of the Internet generally. 
E-mail use was assumed to be a firm indicator of a connection to the Internet. 
About a fifth of firms with their own domain name did not have a website and were presumably using their domain name as an e-mail 
address. For those with a website, 62 per cent of New Zealand respondents were using it to provide online information about their 
business, with just under 30 per cent providing a catalogue of goods and services while a similar proportion provided some sort of 
sales service to customers. 
New Zealand firms of less than 20 staff appeared to make consistently greater use of the Internet compared with their Australian 
counterparts, the survey found. Business services were the highest users in both countries, with companies of more than 20 staff in 
New Zealand at 100 per cent e-mail use, compared with 96 per cent in Australia. 
Use made of the Internet was graduated from casual to sophisticated. E-mail led the pack, followed by information, ordering, selling 
and banking. 
BRC found that the use of the Internet according to location confirmed the impression that the bias in favour of smaller firms in 
provincial centres and rural areas was insufficient to explain the differences between the two groups. 
In use by sector, the largest variance to overall trends was the selling category, where construction firms appeared to be low users 
compared with others. 
 
 
  Farming training 
  
Internet integrator gen-i (formerly Wang New Zealand) has been selected as a preferred systems supplier to design a trainee 
management system for one of the country's largest training organisations, Agriculture ITO which gives agricultural trainees on the 
job training with experienced farmers along with theory at a local establishment or polytechnic. 
 

GE inquiry online 
  
After providing a direct e-mail form to the Environment Risk Management Authority on proposals from the Forest Research Institute 
to test genetically modified pine trees, www.context.co.nz has posted an online form for submissions to the Royal Commission on 
Genetic Modification. Site editor Phil Doherty said the one the commission provided "required a double doctorate in rocket science 
and constitutional law to fill out". 
 
 
  Best legal website 
  
The Auckland District Law Society has been awarded first place for best private sector legal website in the Technology for Justice 
2000 competition run by the Australian Institute of Judicial Administration. The society recently upgraded its website. 
 
 
Technology grant 
  
 
An Auckland company specialising in sophisticated customer relationship solutions for the retail sector, Visible Results, a subsidiary 
of the Atlantis Group, has been granted $360,000 by Technology New Zealand for the next stage development of its loyalty systems 
project. 
 
 
Maxnet move 
  
  
 
Quintin Lake, the founder of nation-wide Internet service provider Maxnet, became its technical director yesterday. The New 
Zealander who started the business at 15 turned 18 last week. Maxnet recently bought Auckland-based Surfer Internet and expects to 
announce further mergers and acquisitions soon. 
 
 
Netrade issued 
   
 
Southfresh, an e-commerce company specialising in reducing transactional cost while providing timely management information and 
control in the exchange of goods, has issued Netrade, a system for local and export trading. Accessible over the Internet it provides a 
neutral trading hub for exporters and their overseas customers to do business in real time on the Web. 
 
 
   
 
  Hitwise begins 
  
After two months of testing, New Zealand's first comparative Web monitoring service, Hitwise (www.hitwise.co.nz), started last 
week, providing website owners and marketing managers with real time information about the surfing habits of more than 350,000 
New Zealand Internet users. 
 
 
  Market sticks to local matters 
  
THE sharemarket appeared oblivious to clouds gathering on the horizon in the United States, as it rose yesterday on fairly healthy 
turnover. 
The NZSE 40 capital index was up 14.80 points or 0.78 per cent at 1917.86, and the small companies NZSE-SCI capital index rose 
1.08 points to 5023.37 . 
A pre-market sale of 7.74 million Baycorp shares, valued at $92.05 million, made up more than half of the total turnover of $167.62 
million on 36.99 million shares. 
Telecom, which gained 21 cents to close at 550, had turnover valued at $28.29 million on 5.22 million shares. 
Richard Burton of Cavill White said Telecom had solid buy orders, and Telstra was also up 3c at 828. 
"I think the market tends to think that at the low $5 mark Telecom's reasonably well priced," Mr Burton said. 
Another possible factor in Telecom's good showing was the news that Australian telco Cable & Wireless Optus had set tomorrow as 
the deadline for expressions of interest in the sale of its mobile, consumer and corporate data assets. Telecom may be a contender. 
"That good performance from Telecom is what really pushed the market up," Mr Burton said. 
"After the American market shut IBM said things weren't going as well as the market had been expecting and their stock got sold 
down US$10 or so. Its fall pointed to another tough day for America tomorrow (overnight NZT) _ Australia anticipated it and we 
didn't." 
Fletcher Forests was down 3c at 38 on a turnover of 8.85 million shares, Building fell 2c to 185, and Energy was up 1c at 825. 
Baycorp fell 30c to 1200, Tranz Rail was down 10c at 355, The Warehouse lost 8c to 590, and Genesis shed 4c to 656. 
NZ Oil and Gas lost 2c to 26, SkyTV was down 5c at 325 and Tower was shed 5c to 470. 
On the upside, Contact gained 3c to 278, Frucor was up 3c at 210, PDL Holdings was up 15c at 400 and UnitedNetworks gained 8c at 
738. 
Montana was up 5c at 310, Scott Technology was up 10c at 240, Ports of Tauranga was up 5c at 545, AMP rose 29c to 2254 and INL 
gained 9c to 360. 
Falls beat rises 41 to 47 on 144 stocks traded. 
On Wall Street, stocks closed lower on Tuesday after renewed fears of slowing earnings hammered chip makers, and worries over 
falling advertising spending hit such media shares as America Online. 

 
  Europe meeting noted 
  
  
 
IT WAS the same old story for the dollar yesterday, as it came back from a historic low overnight at US39.25c but remains ruled by 
euro and Australian dollar moves. 
"The local market tried to buy the aussie dollar up _ it got up to US52.24c _ and the Kiwi followed it up to a high of US39.60c," 
Deutsche Bank vice-president of foreign exchange Andrew Burdon said. 
Upside resistance for the Kiwi was at US39.60-70c. 
"While it's under there, the Kiwi is going to struggle to rally in this environment where the euro dollar has risk to the downside," Mr 
Burdon said. 
For the Kiwi, downside support was at US39.40c and it finished at US39.45c (US39.44c Tuesday). 
The European Central Bank meets today. The currency market will be watching for signs of further intervention, though the bank has 
downplayed the likelihood of boosting the euro in response to Middle East shocks. 
"Clearly there are still problems with the euro, and the market is still going to test the resolve of where the ECB are, so it's all testing 
times," Mr Burdon said. 
The aussie found a new low overnight, at US51.65c. It closed in New Zealand at US51.96c (US52.23c), and the euro was at US85.42c 
(US84.90c). 
The euro gains were based on comments from a Federal Reserve official who noted how the strong dollar was hurting US 
manufacturers. 
"The concern is that the strong dollar creates weakness in other currencies which causes countries to tighten interest rates, risking a bit 
of global slowdown," said David Durrant, currency strategist at Bank Julius Baer in New York. 
The euro also benefited from a tentative Middle East peace deal and weakness in American equities. 
But Mr Burdon said the euro could touch US81c before the bear market turned. 
On the crosses, the Kiwi was at A75.85c (A75.51c), 42.57 yen (42.61), 27.18 pence (27.29), 0.9023 marks (0.9086), 0.6967 Swiss 
francs (0.7001), and 0.4614 euros (0.4645). 
The trade-weighted index was at 46.24 (46.32) and with the 90-day bill yields rallying a couple of points to 6.65 per cent, the 
monetary conditions index eased to minus 1088 (minus 1079). 
Bond yields rallied, the February 2001s closing at 6.59 per cent (6.57), the April 2003s at 6.73 per cent (6.76), the November 2006s at 
6.70 per cent (6.75), and the July 2009s 6.70 per cent (6.74). _ NZPA

Council in talks with developer over Aotea Block plans 
  
  
 
PORIRUA City Council and property development company Land Equity Group would negotiate future development proposals for 
the big Aotea Block of land during the next few months, council chief executive 
John Seddon said yesterday. 
The council had selected Land Equity as the preferred developer and it would take several years to fully develop the land, which could 
accommodate a commercial park, recreational 
opportunities and housing, he said. Carrus Corporation is part of the Land Equity consortium. 
The land, part of a parcel bought by the council earlier this year for about $2 million, was close to Porirua city centre 
and involved about 180 hectares (450 acres). The council had signed a long-term lease this year with Ian Sherwin, of Greater 
Wellington Attractions, to develop about another 70 hectares of the parcel for a leisure park. 
Aotea College has lodged an appeal with the Environment Court against the leisure park. 
Land Equity principal Donald Stott said the proposals would boost Porirua's development and attract business. 
 
 
  Ballentyne moves to Porirua 
  
  
 
WOMEN'S retail fashion company G and M Ballentyne is shifting its head office from Tawa to Porirua. 
The family-owned Wellington business, which has 15 stores between Albany and Richmond, has bought a warehouse and office 
complex opposite R Hannah, which moved its head office and warehouse to Porirua 18 months ago. 
Colliers Jardine director Chris Gollins said the 1900-square-metre complex was surprisingly sold for less than its $700,000 
government valuation. Of Porirua city's last 29 commercial property sales, 27 had been sold above government valuation. 
Most properties sold for anything up to 50 per cent more than their government valuations, he said. 
 
 
  Mega craft retailer to hit Capital 

 CraftWorld's megastore at Westgate Shopping Centre _ a new concept in craft retailing 
  
A NEW concept in the retailing of craft items is due to arrive in Wellington soon by way of a 1000-square-metre store at Porirua's 
North City MegaCentre. 
The store, which will be run by CraftWorld New Zealand, will feature 500 craft booths offering items made by craftspeople from 
throughout New Zealand. 
It will be one of four big stores to move into the MegaCentre in the next month or two. The other bulk retailers are Hand-Carved 
Furniture, which will occupy a 1600-square-metre store, Furniture Safari, which will occupy a 1360-square-metre store, and cycling 
and camping retailer Pack 'n Pedal, which will occupy a 590-square-metre store. 
CraftWorld was started by CraftWorld New Zealand managing director Carl Dysthe and his wife, Marianne, and first opened in the 
Auckland area two years ago. They set up 500 craft booths in 11 aisles at the Westgate Shopping Centre in Waitakere City. 
The Porirua store will also have 500 booths, arranged in 10 aisles, offering almost anything that is hand-crafted. Typical examples are 
items associated with pottery, wood-turning, smocking, leadlighting, furniture and painting. 
Mr Dysthe said the concept of craftspeople displaying their wares at a central point in a supermarket style was first started by two 
former IBM executives in Texas, United States, during the late 1980s. 
Under the CraftWorld arrangement, craftspeople label their products with a price and inventory number and send them in, usually by 
courier, to be displayed at the Craftworld booths. 
They also have the option of personally displaying their items. 
CraftWorld's monthly rents range from $60 for a 60-centimetre-wide booth to $210 for a 2.1-metre-wide booth. 
At Porirua the average booth will be 1.2 metres wide, 60 centimetres from front to back and 1.8 metres high. Apart from the booth 
rent, CraftWorld charges craftspeople who do not personally attend to their displays $10 a month for looking after the booth. 
In addition, CraftWorld charges craftspeople who have signed up for six months _ the minimum time at Westgate _ an 8 per cent sales 
fee on items sold. The fee is 6 per cent for people who sign for 12 months. 
Mr Dysthe said craftspeople paid the CraftWorld rent by automatic payment. The company paid twice a month by direct credit for 
products sold and also sent a computer-generated statement listing sales. 
The target date for the Porirua opening is November 22. Already 85 of the 375 craftspeople operating out of the Westgate centre are 
booked in for booths at the MegaCentre. Of the 500 booths at Westgate 420 are occupied. 
Though there are craftspeople from Wellington and the South Island using the Westgate premises, CraftWorld has yet to attract a lot 
of craftspeople from the lower North Island. 
Mr Dysthe said it seemed people in the lower North Island had a negative attitude toward Auckland, had no need to go outside their 
immediate area, or had not been introduced to the benefits of the CraftWorld marketing system, which freed them up to concentrate on 
making their products without the accompanying time-consuming chores. 
Opening a CraftWorld in the Porirua MegaCentre was an opportunity to get more craftspeople from the lower North Island signed up, 
he said. 
The most common negative levelled at CraftWorld was the narrowness of the aisles. However, the close configuration gave customers 
an intimate shopping experience. People got "wrapped into" what they were looking at, with each booth directly in front of the 
customer's gaze. Conversely, customers were impressed with the sheer size of the layout, Mr Dysthe said. 
CraftWorld shoppers tended to stay on average 90 minutes. There were a few sales staff but they did not trail customers, and the 
individual booths were not staffed. There was an elaborate security system, including cameras, gates and a floorwalker, to counter 
shoplifting. 
A cafe with free coffee and a child's video area were provided at Westgate, and these facilities would also be at Porirua. 
CraftWorld was also looking at locations in Hamilton and Christchurch, and additional locations in Wellington and Auckland. 
"We also want to be on the Hutt Valley side in Wellington," Mr Dysthe said. 
 
 
  Foreign buyers tipped for Taupo eco-sections 
  
  
 
A LIFESTYLE subdivision in Taupo is expected to attract overseas interest. 
Cameron Drive, described as Taupo's first lifestyle eco-subdivision, is in Acacia Bay. The 13 sections are on a grassed and landscaped 
elevated expanse of land off Blue Ridge Drive. They range in size from 3000 to 4000 square metres. 
Developer Bruce Bartley has attempted to ensure that the land has not been radically altered, retaining as natural an environment as 
possible. 
The subdivision looks over Lake Taupo toward Taupo township and Mt Tauhara. 
Marketing agent Elaine Westerman, of Westerman First National, said overseas inquiries, especially from the United States, were 
being received on the Internet for such upmarket subdivisions. 
The development, to be opened on Monday, provided a wooded, landscaped park with controls to protect the environment, she said. 
Covenants protected views for each site. 
Access is by private road, with residents having the use of a communal tennis court and pavilion. 
The initial application for the subdivision was declined by Taupo District Council. However, Mr Bartley successfully appealed to the 
Environment Court. 
Ms Westerman said sections ranged from $195,000 to $320,000. Price depended on views, sun and position. Sections at the top of the 
subdivision overlooking Lake Taupo were the dearest. 
 

GPG frowns as big grower joins battle for Enza 
  
 
 
THE bid for control of apple exporter Enza is about to turn sour. 
Timaru millionaire and corporate apple grower Allan Hubbard is expected to make a big share grab today _ to the annoyance of 
Guinness Peat Group, which is chasing a controlling interest. 
GPG's New Zealand chief, Tony Gibbs, said yesterday that interests associated with Mr Hubbard were the new bidder Enza's board 
had been told to expect early this week. 
Mr Gibbs said Mr Hubbard controlled New Zealand's biggest apple growers, the listed company Grocorp and Hawke's Bay Apples. 
"This must be a grower's worst nightmare," Mr Gibbs said. "It is politically and morally unacceptable to have New Zealand's largest 
apple grower trying to dominate and control Enza." 
GPG did not want to dominate the apple exporter. It wanted to get the politics out of the company and improve returns to all growers, 
he said. 
Mr Hubbard did not return The Dominion's calls but Enza chairman John McCliskie last night confirmed the board had been told late 
on Friday that Mr Hubbard intended to stand in the market this week. 
GPG and Fay Richwhite Partners are seeking a 20 per cent stake each in Enza. They are offering $1.50 share and by Friday night had 
just under 7 per cent each. Their offer is now unconditional. Until GPG and Fay Richwhite entered the market on Wednesday, Enza 
shares had been trading sluggishly at about 65c and 70c. 
Mr McCliskie said the bidding by the two corporates for shares in the monopoly exporter, a producer board spinoff that became a 
private company in April, had inspired growers to buy "tens of thousands" of shares late last week. 
Enza has a share-owning cap of 20 per cent. Mr Hubbard's interests have an 8 per cent stake in Enza, meaning he could only buy 
another 12 per cent, but industry sources last night expected him to argue there was no link between Grocorp and Hawke's Bay 
Apples, which was set up recently to buy the Hawke's Bay orchards of Eastern Equities. 
A spokesman for Mr Hubbard last week said there was no connection between the Hawke's Bay Apples move and the 80 per cent 
stake taken recently in listed company Grocorp by a Timaru company, Apples Aotearoa. 
Dominion inquiries show Mr Hubbard's Timaru accountancy firm Hubbard Churcher is represented in both companies. 
The two companies' assets make up about 12 per cent of the industry. Grocorp chairman Grant Sinclair is also a director of Hawke's 
Bay Apples. 
GPG and FRP also say there is no formal link between them. 
FRP, formed from Fay Richwhite New Zealand and majority owned by Bill Birnie, who was the investment banker's chairman and 
chief executive, had no shareholding or financial linkage with GPG, Mr Birnie said. 
FRP "will vote the way we wish to" when it had a seat on the Enza board, he said. 
Mr Birnie said though his company supported the free market he wanted to keep Enza's monopoly, at least for now. He did not want to 
upset the industry. 
Mr McCliskie said he had had "very positive" indications about FRP and GPG's intentions for Enza. 
Mr Birnie said financing small growers through the year was his biggest concern. Big growers could get by without the progress 
payments or "trade finance" Enza made to growers throughout the season, funded by up to $300 million debt a year. 
Mr Birnie rejected grower suggestions that GPG and FRP's $1.50 offer did not accurately reflect Enza's net value asset backing. Enza's 
book values were, in cases like its coolstores, much higher than market value. 
Also, the offer reflected the possibility the industry would be deregulated which could mean a revenue drop for Enza.
 
 Fewer tip official interest rates rise 
  
 
ONLY a handful of economists are expecting Reserve Bank governor Don Brash to increase official interest rates next month in the 
quarterly monetary policy statement. 
Falling business confidence and a weak domestic economy have sparked a revision of forecasts by New Zealand economists. Now, 
four out of 13 economists polled in a Reuters survey forecast the Reserve Bank would increase the official cash rate by 0.25 per cent 
on August 16. 
That compares with nine out of 14 surveyed 10 days ago expecting the ocr to increase by 25 points. 
Three others expect the Reserve Bank to wait till October to increase official interest rates, used as a benchmark for home mortgage 
rates and business lending. 
Seven see the ocr being 6.75 per cent by year-end, three predict it will be 7 per cent, one 7.25 per cent, and three expect no more ocr 
rises and it to hold at 6.5 per cent. 
The ANZ Bank said it expected only one more rate rise _ of 25 basis points in October _ before year-end, and "our projections are for 
the Reserve bank to maintain the ocr at this level until late 2001". 
Though the economy was subdued, the Reserve Bank faced "something of a quandary at present", the ANZ said. 
The consumers price index had shown a rise of 0.7 per cent in the June quarter but about half of that was from higher petrol and 
tobacco prices with limited signs of more generalised inflation pressures. 
But the Quarterly Survey of Business Opinion, out last week, reveals that expectations that costs and prices would rise have 
skyrocketed. The pressures were being felt by manufacturers, builders and merchants. That backed the view that inflation would rise 
sharply during the next few quarters. 
The Reserve Bank would have to weigh up the opposing influences of a slower domestic economy and the likelihood of seepage of 
higher costs into prices at some stage in the next few months.
 
 Fund invests in Zeacom 
  
 
AMP Private Capital NZ Fund will invest $2.5 million in telephone technology company Zeacom Group _ the first investment for the 
new private capital fund. 
AMP said yesterday its public offer earlier this year raised $50.7 million. 
It was the first public offer for a private capital fund in New Zealand, AMP said. AMP will manage AMP Private Capital NZ Fund. 
AMP has an another in-house fund that has invested more than $100 million in private, smaller and strongly growing New Zealand 
companies. 
Zeacom develops and markets call-handling software that helps organisations improve customer service. 
With joint-venture partner Caltech Capital partners, AMP will help Zeacom expand. Caltech is a specialist New Zealand technology 
venture capital fund manager. 
Caltech and Hontung, a Taiwanese-based investor, made an initial $2 million investment in Zeacom 15 months ago. Zeacom was 
started in 1995 by Miles Valentine, its chief executive.
 
 The sleeping giant awakes 
  
 
 
IT'S a little overdue, but the signs are growing that Kiwi investors are facing more exciting times. A string of new floats and capital 
raisings are on the way to take advantage of the more ebullient mood of recent weeks in the sharemarket. 
Many shares have shown remarkably strong gains. As is usual in the New Zealand market most people aren't noticing, as the main 
sharemarket index, the Top 40 seems to be barely moving. This index is dominated by New Zealand's biggest company Telecom, 
which is trading $2.50 below its 2000 peak of nearly $10, set just three months ago. 
To be fair, Telecom has also moved up lately, helped by confirmation of some positive news last week, such as the link with 
Commonwealth Bank of Australia. This has seen it gain some 60 cents from the low earlier this month. 
But in percentage terms Telecom's rise is uninspiring compared with the heady gains shown by stocks like Montana (on takeover 
speculation), Baycorp, The Warehouse, Waste Management, Sky City and, of course, the Fletcher stocks. Examples: Fletcher Energy 
has risen by $3.50 a share, and Sky City by $1.20. 
WHAT'S happening? First, there is renewed confidence, which can be put down to the so-called wealth affect, flowing from the 
certain profits of $1.25 or more a share many Fletcher Paper stakeholders should bank during the next week or so. Speculation of the 
end of the protective Fletcher "letter stock" structure has allowed the other Fletcher stocks, Building, Energy and Forests, to also show 
strong gains. 
At the same time, some investors are benefiting from the takeover of property group St Lukes. St Lukes is following the now time-
worn path of being taken over by Australians, in its case, Westfield. 
Rumours late last week suggested Montana, now New Zealand biggest wine company, is likely to end up in the hands of Southcorp, 
formerly South Australia Brewing. This follows the effective takeover of Nobilos by the BRL Hardy Group, and reflects the growing 
interest in New Zealand wine companies by bigger Australian firms. 
The combination of investors feeling wealthier due to the increased value of their share portfolios, and waiting to receive hard cash 
from Fletcher Paper and St Lukes, is encouraging them to look for new investments in the sharemarket, encouraged by its buoyancy. 
Though yields on New Zealand shares remain high by international standards many brokers continue to recommend caution about 
buying at present. In part, this has been due to fears that the sudden inflow of new money has seen many share prices "get ahead of 
themselves", to use the jargon. Experience suggests that after every strong gain, a share price needs time to consolidate. At such times, 
prices can temporarily fall back, encouraging new buying interest. 
This cautious attitude could change following the positive announcements from Federal Reserve chairman Alan Greenspan late last 
week on the United States economy. 
Dr Greenspan's suggestions that US growth was being tamed, and that further interest rate rises might not be necessary, tended to 
confirm views among international fund managers. They have been reinvesting in the US, expecting history to repeat itself and the 
sharemarket to move back to robust health over the coming months as the Federal Reserve Bank relaxes monetary policy. 
If Reserve Bank governor Don Brash adopts a similar attitude here, the local market could see further gains. 
ALL this is encouraging some companies to take advantage of growing investor confidence. 
This change of sentiment has come suddenly. Just three months ago companies cancelled a whole string of floats. This included the 
long hoped-for float (really a re-float) of the ANZ Banking Group's New Zealand assets for an estimated $500 million. Telecom also 
postponed plans to float parts of its investments in subsidiaries such as AAPT, Xtra and the Southern Cross cable. 
Other postponed floats included New Zealand's biggest biotechnology company, Genesis Research, which had been planning a $160 
million issue. E-commerce company Advantage was planning to raise money to list in Australia. And US group Blue Star said that the 
poor state of the local market meant it would sell Whitcoulls through a trade sale rather than a public float. 
One reason for the postponements was the lacklustre state of world sharemarkets, which were anticipating further rises in global 
interest rates. But the postponements were also influenced by the election of the Labour-Alliance government. This prompted sharp 
falls in business confidence, with investors suddenly deciding the new government was far more left-leaning than they had been led to 
expect. 
Business surveys show that wariness about the new government is continuing, and that some sectors, such as retailing, are finding life 
tough. Investors as a bunch might be sympathetic to business concerns about the re-empowering of trade unions and renationalising 
ACC. But they can sense obvious positives flowing from the low dollar, which is encouraging exports and leading to a boom in tourist 
numbers. 
This shows that it is possible to see a solid if selective sharemarket rally at a time when many investors remain unhappy with the 
general direction of government policy. The word selective is used deliberately: many companies in out-of-favour sectors continue to 
languish. 
SO to get back to where we started, the revitalised New Zealand sharemarket means many people have surplus funds to invest _ and a 
string of entrepreneurs are only too happy to help them spend it. The cancellation of the ANZ Bank float removes the only sizable 
offering in sight, though some of the plans to seek Stock Exchange listings for the others are probably being dusted off. 
They are are being encouraged by the success of the Frucor float. Promoters went ahead with this float in spite of predictions of 
disaster when the prospectus came out. Happily listing in a stronger market, its shares have bounced 70 cents above the issue price in 
less than a month. 
Last week there was the announcement of a new wine company, The Crossings, in Marlborough, being backed by the Manawatu-
based Farmers Mutual. This is seeking $7 million. 
Brokers advise that eight new floats will be announced in the coming weeks and months, but are reluctant to give details. One is 
expected to relate to Dairy Foods-Anchor Brands, resulting from changes in the dairy industry. 
Brokers advise that capital note and other debt issues are also imminent. The present environment is also expected to be positive for 
the merger of Powerco and CentralPower. It is planned these two companies will be relisted on the Stock Exchange. This entity will 
become a significant company in its own right, entering the Top 40 index at number 25 as a compliance listing.
 
 Option for RMG 
  
 
 
Receivables Management Group says it has an option to buy Credit Solutions Australia Pty for less than A$9 million. The acquisition 
was subject to due diligence by RMG. It was expected to be settled at the end of August, RMG said.
 
 Buyer found 
  
 
Aquarium operator Aquaria 21 said it had found a new buyer for its Shanghai Aquarium. Radwin Properties would buy the asset, with 
settlement scheduled for September 15. A conditional agreement to sell the aquarium to Australia-based Oceanis Holdings Pty for 
US$8.33 million (NZ$18.25 million), deal fell through.
 

 
 Leading action against global warming harmful for economy 
  
 
THE Government's decision to ratify the Kyoto Protocol on climate change is a wake-up call for business. 
Before looking at the implications for business, let's set aside two issues which have no immediate, irrefutable conclusions. 
First, the uncertain state of the scientific evidence, and the overblown claims of some scientists who seem to have forgotten about 
margins of error and long-term natural effects when assessing possible causes of climate change. 
Second, let's not focus on differing predictions of the effects (if any) of global warming. Some predict that global warming will cause 
environmental and social catastrophe _ a strong example, in my view, of environmental doom-mongering and a yearning to return to 
the 60s womb. Others point to the positive effects of global warming and suggest that, should it occur, these would balance the 
harmful effects. 
Let's focus on why the Government thinks New Zealand should ratify the Kyoto Protocol. The Government's first argument refers to 
South Pacific island nations which may disappear because of rising sea levels. Really? Which? When? How many of these nations' 
people will be affected? How many live in New Zealand now or could move here or to other countries? There may well be an arguable 
case here, but facts are required. 
The second argument refers to the New Zealand economy being based on a moderate and reliable climate. Is it a bad thing if the 
climate changes during the next 100 years so that pastoral farming and horticulture are viable over a greater area? On such an 
important issue, the arguments need to be reasoned and conclusive, not pale-green, feel-good assertions. 
However, the Government has a mandate _ as it keeps telling us _ and so mitigation of its efforts should be considered. Brutal 
applications of a carbon charge, as floated by Energy Minister Pete Hodgson, might "position New Zealand to be up with the leaders", 
but would be disastrous for the economy. The ministerial group charged with developing a climate change action plan must consider 
two principles. 
First, equity of economic effects. Targeting of carbon dioxide will distort the outcomes unless other greenhouse gases are also 
targeted. In this event, taxes on outputs from agriculture will have the opposite effect to supplementary minimum price subsidies when 
book numbers of stock units soared. 
Transport within New Zealand is grossly inefficient because of outdated roading policies. A climate change tax on fuel might lead to a 
revolution in transport modes. If not, it will simply add to the input costs of all goods produced. 
Second, the adoption of other sensible policies (such as roading reforms) and voluntary agreements will produce the most effective 
and non-distortionary outcomes. 
For example, in 1994 a voluntary agreement formed the Cement Industry Energy Management Association). The agreement was 
between the cement industry, the Energy Efficiency and Conservation Authority and the Maruia Society, and aimed to reduce carbon 
dioxide by 12 per cent by 2000. 
Since 1994 the two cement companies (both overseas owned) have undertaken research and capital expenditure resulting in a 12 per 
cent reduction in the amount of carbon dioxide produced for a tonne of cement manufactured. 
Simple agreements led to simple targets, achieved without job losses. Imposition of taxes would have led to production moving to 
non-ratifying countries and the loss of 400 West Coast and Northland jobs. 
The contribution to greenhouse gas emissions by New Zealand is as a gnat's nose hair in the greater scheme of things compared with 
the outputs of China, India and the United States. 
It was commendable for New Zealand to be seen as a leader in the promotion of a nuclear-free Pacific or the abolition of apartheid. 
These were not economically harmful goals and New Zealand leadership was effective. 
Leadership in ratification of the Kyoto Protocol will significantly harm the New Zealand economy while having no practical effect on 
the decisions of big nations or the world climate outlook. 
* Rex Williams, managing director of Milburn New Zealand, writes as part of a series of fortnightly columns by members of the 
Business Roundtable
 
 Kiwi and Tasman agree to merge 
  
 
KIWI Dairies and and Tasman Milk Products have reached an agreement to merge. 
The merger was backdated to June 1, the start of the new milk season. 
Tasman shareholders will pay 50 cents a kilogram of milk solids in the form of share payments spread over three seasons to join Kiwi. 
Tasman Milk has 212 suppliers accounting for about 1.5 per cent of national milk production. Kiwi processes 38 per cent. 
Tasman Milk chairman Tony Reilly said shareholders were determined to ensure the business was retained in cooperative ownership. 
"This has driven the Tasman board to choose Kiwi Dairies as its preferred merger partner," he said.

22 Aug 2000

Challenge not in Shell sights 
  
  
 
GLOBAL energy conglomerate Shell has vowed not to swallow petrol retailing newcomer Challenge _ even if it does 
make an offer for Challenge's parent company Fletcher Energy. 
The Dutch-based group said yesterday it would sell several of Fletcher Energy's key assets _ including the Challenge 
petrol business and its 14.2 per cent stake in the Marsden Point oil refinery _ should it seal a bid for Fletcher's energy 
division. 
In confirming it had sought Commerce Commission clearance to buy Fletcher Energy, Shell said it was focused firmly 
on the group's exploration and production activities. 
Motorists would therefore be unaffected by any offer it might make for the group, New Zealand country chairman Ed 
Johnson said yesterday. 
"We have no interest in the Challenge retail network," he said. "We are very conscious of the competitive nature of 
how the market has developed. 
"The focus of Shell's acquisition would be the exploration and production assets . . . but given Fletcher Energy's 
diversification, there are other assets that may have to be included . . . " 
Both Shell and Fletcher Challenge yesterday described the commission application as a preliminary first step. 
* Shell coy on offer p10

Wine company goes public 
  
 
 
A NEW Marlborough wine company, The Crossings (Marlborough) Limited, is seeking $6 million from the public as 
part of the development of a $13 million wine company based in the Awatere Valley. 
Investors could subscribe in two instalments with a minimum subscription of $5000, the company said. The public 
share offer opened yesterday. 
Crossings intends combining two established vineyards, the Medway and Brackenfield vineyards, with a third Awatere 
Valley property it has bought. It will develop the three vineyards, which have 140ha of planted vineyard and are 
capable of producing 70,000 cases of premium wine a year. 
The offer is for up to six million ordinary shares at a price of $1 each to be paid in two instalments: 50 cents on 
application and 50c on February 28 next year. 
A projected dividend of 8c a share, fully imputed, is proposed from 2005, when the company reaches full production. 
The company paid $5.9 million for the two existing vineyards and existing partners were offered the $1 shares in 
Awatere Valley property at a discount of 90c each on August 21. Partners were also offered the opportunity to 
subscribe to $1.3 million of additional shares. 
Partners were given the option of buying convertible shares to allow the original investors to get a dividend of 5c a 
share from December 2001. 
The offer is conditional upon $1 million being raised by the expected closing date, December 15. 
When production from the third vineyard comes on stream in 2004, Crossings plans to establish its own winery. _ 
NZPA
 
 Tranz Rail makes job cuts at the top level 
  
 
 
TRANZ RAIL's strategic review claimed its first executive casualties yesterday in what is seen as a precursor to the 
head office being moved from Wellington to Auckland, possibly within a year. 
The company-wide review was initiated by new chief executive Michael Beard when he took the helm earlier this year. 
Gone are the executive manager of corporate services Murray King, of human resources Steve Voullaire, and of 
government relations Paul Spackman, and marketing group general manager John Moriarty. 
Mr King will continue to work on strategic projects as an external consultant and Mr Voullaire, who is retiring, will 
continue to manage the company's collective employment contract negotiations. 
Institutional investors are understood to have been pushing for new blood at the top. 
The four so far affected by the management shakeout had been with the company for up to 30 years. 
A source said the review was about a radical change in culture at the company. 
Shifting head office to Auckland and taking suitable staff with it would make that change easier to implement, the 
source said. 
Tranz Rail spokesman Fred Cockram confirmed that moving head office was being considered as part of the review, 
but no decisions had been made. 
There were good arguments for remaining in Wellington, including the proximity to Government and regulatory 
bodies. However, some key customers were based in Auckland, he said. 
"Clearly the bulk of the organisation does not shift _ we are located over the whole country. Much of our operation is 
absolutely committed to the areas it is in. 
"The only element that really is possible for shifting would be the core management functions. Even with that, it would 
be far too early to say if the whole of that would move or just the general manager section of it. 
"It is one of a very wide range of things about the company's strategic future that are being considered. 
"It is not even decided that there will be a shift of any sort," Mr Cockram said. 
The general managers group employed about 25 staff, while the larger corporate office could employ more than 100 
people. 
Tranz Rail operates extensive regional offices in Auckland, but any move would probably require additional space to 
be leased, Mr Cockram said. 
Operational staff would remain in Wellington, based in the Railway Station building. 
Mr Cockram said alternative uses had been mooted in the past for the building, including a hotel and shopping 
complex. 
"The building is not locked in to being the headquarters." 
A comprehensive announcement on the strategic review has been delayed by about two months with Mr Beard 
overseas for about a month.
 
 Shell coy on formal Energy offer 
  
 
SHELL completed due diligence on Fletcher Energy about two weeks ago, but New Zealand chairman Ed Johnson was 
coy yesterday about whether it had submitted a formal offer. 
Dutch-based Shell has sought Commerce Commission clearance to buy Fletcher Challenge's energy division, 
promising to sell several Fletcher Energy assets _ including the rival Challenge Petroleum petrol retailer _ if a deal 
went ahead. 
Asked yesterday whether Shell had held formal talks with Fletcher Challenge about buying the energy business, Mr 
Johnson said discussions had taken place within the due diligence process. 
"We had a time in a data room to ask questions and to understand the assets better. That process was completed about a 
fortnight ago." 
"First bids" for the energy division were due with Fletcher Challenge last week, but Mr Johnson would not comment on 
whether Shell had lodged a conditional bid or what its next step might be. 
Commerce Commission clearance was a "precondition to moving ahead". 
In its commission application made public yesterday, Shell has offered to sell the following Fletcher Energy assets in 
addition to Challenge Petroleum: 
* Interests in the Kupe natural gas field. 
* Interests in Kapuni Gas Contracts. 
* Interests in Fletcher Challenge Gas Investments, which buys gas from Contact Energy and sells it to the Taranaki 
combined cycle power plant at Stratford. 
* Fletcher Energy's 14.2 per cent interest in the New Zealand refining Company (Shell already holds a 17.14 per cent 
stake). 
Analysts said Shell would have raised politically sensitive competition issues if it had attempted to buy FCL Energy 
without a commitment to sell some assets. Some believed it might still raise commission concerns about dominance in 
some energy markets. 
Commission chairman John Belgrave said yesterday that his staff would assess what impact the proposal would have 
on a range of markets. The Commerce Act prohibited deals resulting in dominance being acquired or strengthened in 
any market. 
Shell's application follows months of market speculation about the next step in the break up of Fletcher Challenge, as 
directors assess interest in the group's three remaining divisions. 
Some rumours have suggested Shell might be prepared to pay between $8.50 and $10 a share for the energy division. 
Fletcher Energy's shares finished 1 cent lower at $7.75 yesterday, after initially jumping to $7.95. This values the 
division at about $2.6 billion. 
Several other overseas oil companies, including Enron, BP-Amoco, Chevron, Unocal and Apache Energy, are reported 
to have carried out due diligence on Fletcher Energy. 
Fletcher Energy and Shell are already partners in the offshore Kupe and Maui gasfields and in the new Pohokura field 
off the north Taranaki coast. 
However, both companies emphasised the commission application did not mean a deal was imminent _ it was a 
preliminary step in a long process. 
Fletcher Challenge chief executive Michael Andrews played down the immediate significance of Shell's Commerce 
Commission application. 
"Clearly, we do not know whether Shell will be successful in its application and if it is, whether it will move to submit 
an offer for these assets," he said yesterday. 
"Therefore, this application should be seen as a very preliminary step in a long process. 
The Commerce Commission's decision on Shell's application is due by September 1, though the timetable can be 
extended. Shell has also sought Overseas Investment Commission approval.
 
 Business expo provides look at latest trends 
  
 
THE Capital Business Show at Wellington's WestpacTrust Stadium tomorrow and Thursday is being touted by the 
event's organisers as the biggest business showcase to be held in the city. 
The event will combine 14 seminars from business leaders and politicians with more than 100 company trade stands. 
Seminar speakers include Finance Minister Michael Cullen and Australian e-commerce expert Keith Holtham. 
Events co-ordinator Gavin Tanguay says the show aims to attract business decision makers from the region so they can 
look at trends in business. 
He is at pains to emphasise the show will focus on a wide range of areas relevant to business, not just IT. 
Dr Cullen's seminar is expected to be address economic policy issues, Information Technology Minister Paul Swain 
will discuss e-commerce and ACT NZ leader Richard Prebble social policy. 
Admission is free and Mr Tanguay expects between 4000 and 6000 people to attend.
 
 Figures show rise in retail sales 
  
 
PRELIMINARY retail sales figures issued by Statistics New Zealand yesterday belied the doom and gloom merchants. 
Dow Jones polled nine economists who forecast no growth, but instead seasonally adjusted sales rose 1.1 per cent in 
July from June. Excluding motor vehicle sales and motor vehicle servicing, retail sales rose 1.7 per cent from June. 
The retail indicator is an experimental series compiled by Statistics NZ from early responses to its more detailed retail 
trade survey. It has warned that the final figures might vary considerably from the preliminary figures. 
Bank of New Zealand economists said in the bank's weekly outlook yesterday that they had expected further evidence 
of a spending slowdown from yesterday's figures. 
They had picked a 0.2 per cent fall in sales, lowering annual growth to 5.4 per cent in July from 7 per cent in June. 
Retail sales are expected to play a strong role in the slowdown in growth in the second and third quarters of this year. 
BNZ economists said much depended on a sustained improvement in household incomes but the latest round of petrol 
price rises were as much a growth-restraining story as an inflation story. _ NZPA
 
 Battles begin as wool industry reforms 
  
 
FACTIONS in the $1 billion wool industry are jostling for some commercial action after the announcement that 
woolgrowers have given a huge vote of support for an industry shakeup. 
More than half New Zealand's sheep farmers have said a resounding "yes" to the recommendations of the $3 million 
industry-commissioned McKinsey report on the ailing industry. 
Ninety-one per cent of the sheep farmers who voted said "yes" to the postal vote question, "do you support the 
recommendations of the McKinsey report?". 
Merino breeders' "yes" vote was 95.5 per cent, crossbred and others gave a 91.5 per cent "yes" vote, and mid-micron 
farmers, who have been advised by McKinsey to think again about their choice of breed, offered a 83.4 per cent "yes" 
vote. 
The Wool Board said 58 per cent of registered growers responded to the postal vote. 
Returns from wool growing have been falling by up to 6 per cent a year, according to McKinsey. It made 10 
recommendations for sweeping reform and urged farmers to vote for the package to make it effective. 
The farmer response has been welcomed by even those most likely to lose their jobs from the restructure, like Wool 
Board bosses. Industry insiders expected wool dealers, brokers and vested interests to fight for a place in the new 
regime. 
The most opportune time for faction positioning is the appointment next month of a seven-member implementation 
project team. 
Board chairman Bruce Munro said all but one of the places on the team had been filled. 
He said he was delighted the vote gave such a clear mandate. He would not say who the board had picked for the team. 
Mr Munro said the transition to levy-free commercial structures was bound to be difficult. 
The only levy would be 1 per cent for a proposed research and development company. Woolgrowers now pay 5 per 
cent of their earnings to the board. 
McKinsey suggests this money, used mostly for promotion, has been non-productive. 
Board chief executive Mark O'Grady said the vote was a "very clear end of a strategic direction". 
Federated Farmers wool chief Chris Lester said McKinsey's proposed research and development company SheepCo, 
should now be a certainty. 
The makeup of the implementation team would be vital if the McKinsey strategy was to be successful, he said. 
Wrightson chief executive Alan Freeth, whose listed company dominates wool auctioneering, welcomed the vote. 
Hopefully, the McKinsey strategy would banish the industry politics and groupings that had been such a barrier to its 
progress, he said. 
Wrightson would be keen to participate in the restructure, he said.
 
 Wilson Horton loss 
  
 
Publishing group Wilson and Horton posted a bottom-line loss of $9 million for the half-year to June yesterday. Total 
operating revenue increased 8 per cent during the period to $227.4 million. Exceptional items, including foreign 
exchange losses of $30.1 million, dragged the result down.
 
 Alternate named 
  
 
Air New Zealand said Chew Choon Seng had been appointed by Cheong Choong Kong as his alternate director on the 
Air New Zealand board, and Michael Tan had appointed Huang Cheng Eng as his alternate director.
 
 Director resigns 
  
 
Colonial First State Property director Enzo Silverii resigned on July 14.
 
 Main index ends its trading lower 
  
FLETCHER Energy ended 1 cent weaker at 775 on the sharemarket yesterday, though it had risen as high as 795 after 
Shell said it had applied to the Commerce Commission for clearance to buy the letter stock. 
There were $14.7 million worth of Energy shares traded. The stock has climbed from just over $4 in February but 
traded lower by the end of the day. 
ABN Amro Equities institutional sales head Nigel Scott the market had been expecting Shell to make a bid for Energy 
because of the two companies' involvement with projects such as the Pohokura prospect. 
Interest in Fletcher shares was stagnant in the lead-up to Fletcher Challenge's announcement about its future, with 
investors more tentative in their approach to the stocks, Mr Scott said. 
"As we get closer to the (announcement) people are getting more wary about which way they see things heading." 
The NZSE 40 capital index as a whole ended weaker, closing down 18.16 points (0.85 per cent) at 2106.97, but the 
NZSE-SCI capital index of smaller stocks gained 5.32 to 5494.52. 
Turnover totalled $125 million, with falls outnumbering rises 56 to 41 among the 155 stocks traded. 
Telecom was 9c softer at 696 on turnover of 5.8 million shares, worth $40.6 million, but this was in line with the 
general weakness in offshore telcos. 
The company's decision to halve its dividend from next year was also a factor. 
Among the other top 10 stocks, Independent Newspapers _ which last week posted a $34.6 million profit for the year to 
June _ came off 15c to 400. 
Carter Holt Harvey was down 2c to 183 and The Warehouse fell 3c to 605. Tower, Fisher and Paykel and Auckland 
Airport all lost 5c, to 540, 735 and 290. 
Elsewhere, Lion Nathan was 11c lower at 455. 
The company was coming off the New Zealand section of the Morgan Stanley capital index and was not re-listing on 
the Australian side, which could account for the fall, Credit Suisse First Boston dealer David Price said. 
Both Air New Zealand stocks lost 3c, the A shares to 181 and Bs to 232. Advantage and Bendon both rose 3c, to 290 
and 191. 
On the upside, Frucor gained 4c to 240 and GDC rallied 10c to 485. 
United States stocks ticked lower on Friday, as Wall Street sat back to wait out the Federal Reserve's policy-setting 
meeting overnight tonight

Kiwi predicted to go lower 
  
 
THE dollar was still a "sell on rallies" currency and could trade at an all-time low of US43.40c in coming weeks, Bank 
of New Zealand said yesterday. 
The Kiwi closed on the currency market at US45.22c, up slightly on its US45.18c close on Friday, but the aussie was 
down to US59.02c from US59.35c on Friday. 
In its foreign exchange market commentary, BNZ said the market would be looking for inspiration following last 
week's "skirtish and directionless" trading. 
The Federal Reserve meeting tonight was unlikely to provide any new direction, with market participants reasonably 
confident rates would be left on hold, BNZ said. 
The outlook for the Kiwi wasn't good _ the euro was failing to hold on to its gains against the greenback, which meant 
further downside looked likely for the Kiwi. 
"Strong trendline resistance is noted at US45.55c, which should form the top side of the range on the week. 
"The New Zealand dollar has bounced strongly off the US44.75-80c region several times and this level will form good 
support initially but we are looking for a break to fresh lows in the coming weeks," the bank said. 
"A break of US44.60c will see a test of trendline support at US44.40c then a move lower to US43.40c. We recommend 
selling New Zealand dollars ahead of US453.55c with a tight stop." 
But on the cross-rates yesterday the Kiwi was stronger against all other main currencies, closing at A76.62c (A76.38c 
on Friday), 48.90 yen (48.79), 30.33 pence (30.22), 0.9746 marks (0.9660), 0.7777 Swiss francs (0.7728) and 0.4982 
euros (0.4941). 
The trade-weighted index was higher at 51.07, from 50.92 on Friday. 
With 90-day bank bills at 6.67 per cent (6.67 per cent), monetary conditions tightened, with the index at minus 589 
(minus 603). 
On the bond market, the February 2001s were at 6.64 per cent (6.69 per cent on Friday), April 2003s at 6.68 per cent 
(6.69), November 2006s at 6.67 per cent (6.65), and November 2011s at 6.65 per cent (6.66). 
On the Australian currency market the aussie dollar subsided to US59c in a slow market that was disappointed with the 
currency's inability to rally after solid gains last week. 
At the close, the aussie was at US$0.5895/00, from US$0.5931/36 at the close Friday. 
The US dollar rode shotgun over the euro on Friday night and this drove the aussie back down and dampened 
enthusiasm on the local front yesterday. 
The aussie ranged from US$0.5896 to 0.5914 today. 
"And it has really traded the figure 10 (59.00-10) for most of the day," said Steve Chater, foreign exchange and treasury 
manager at IBJ Australia. 
"It is a little disappointing because it didn't hit that 59.40 (US cents). People thought there may be some stops at 59.50-
60 but it didn't quite get there," he said. 
"It has to be (US) dollar strength. The aussie seems to have failed. If it had held above 59.40 it would have been quite 
good technically but now a lot of people are calling it back to 58 cents." 
Mr Chater said it was on the cards that traders might seek out stop-loss sell orders at US$0.5880 now. 
"We're going to be trading 58 cents to 59.50 for a little while. It's just been disappointing on the upside," he said. 
"I think you'll find that the offshore guys have a will to sell it." _ NZPA-AAP

Heifer, cow prices down 
  
 
PRIME heifer and cow prices eased slightly at Stortford Lodge yesterday. The ewe market also eased, but lamb prices 
were firm. Prices (L I Redshaw): 
  
* Prices for very heavy prime export lambs continued to climb at Feilding yesterday and heavy prime cattle were again 
in strong demand. Price (Wrightson): 

20 Sept 00

Waipukurau markets firm 
  
SHEEP prices at Waipukurau showed no signs of easing yesterday as markets remained firm in line with processors' 
schedules. Prices (Wrightson): Prime sheep: Ewes $50-$55, export ewes $40-$46, woolly ewes up to $64, shorn lambs 
$90, 2th ewes $54, lighter $28-$35. Store sheep: Ewes and lambs a/c $39.50, hoggets $50-$70. 

Free-trade links hold key to bargains - O'Reilly 

Dr O'Reilly passes on his tips for economic recovery 
  
 
AS THE New Zealand dollar fell to an all-time low against the United States dollar yesterday, Irish business magnate Tony 
O'Reilly suggested that New Zealand should apply to join a free-trade region. 
"If you do and if it is possible and it is profitable you will win because New Zealanders are winners," he said. 
Dr O'Reilly was addressing a lunch in Auckland as guest speaker of the Ireland Fund of New Zealand. 
New Zealand needed bigger affiliations than just Australia. He suggested, along with the United States, affiliating with 
Canada and Mexico "to provide new and bigger bargains". 
New Zealand, in a curious Presbyterian way, was a much more reserved country that Ireland. 
Ireland would not have let the Motorola contract go from Christchurch, for example. "We would have loved them to death," 
Dr O'Reilly said. 
The Irish Industrial Development Authority capitalised on opportunities but it was in no better position than New Zealand. 
It had attracted Microsoft, Dell, Compaq and other computer giants to provide 25,000 to 30,000 jobs in Ireland. 
The rise in the US dollar was one of the main reasons New Zealand had lost the spring in its step, Dr O'Reilly said. 
But it was unbeatable when "it [New Zealand] got focused". 
This focus was achievable "possibly with a change in tax policies and affiliations". 
 
40c letters to stay despite NZ Post loss 
  
  
 
THE cost of posting a standard letter will remain 40 cents, despite New Zealand Post's worse-than-expected $3.8 million 
tax-paid loss in the three months to June 30 and prediction of a difficult year ahead. 
Instead of raising postage charges to claw back revenue, the state-owned enterprise would focus on improving 
productivity, stepping up its e-business strategy and building its international consultancy business, chief executive Elmar 
Toime said yesterday. 
"We haven't got any plans to raise the basic letter price," he said when asked if it was being contemplated. "With higher 
prices, we could expect a check in demand or a more rapid substitution of other services. So it's not an automatic 
solution." 
The quarterly loss, compared with a $5.1 million profit in the corresponding quarter last year, covered the transition 
between NZ Post's old March 31 balance date and its new one of June 30. 
An increasing substitution of electronic communications for post, the effects of competition and a flat domestic economy 
had combined to reduce mail volumes 5 per cent compared with the corresponding quarter last year. 
The loss was worse than the reduced profit directors had expected, Mr Toime said. 
The company had returned to profitability in the first two months of the new financial year, but directors still expected the 
annual result to fall short of the $30.1 million surplus posted in the latest March year. 
Quarterly operating revenue rose 7.1 per cent to $219.2 million, boosted by the acquisition of Ansett Express in July last 
year and strong growth by NZ Post International. 
However, the revenue improvement was overshadowed by a 12.5 per cent jump in quarterly operating expenses to 
$217.9 million, reflecting the Ansett acquisition, business expansion and the cost of developing strategies. 
Restructuring costs, finance costs and taxation pushed the quarterly result into the red. 
The company would know by the end of the new financial year if it would need to adjust to a permanent downturn in mail 
volumes, Mr Toime said. Staff cuts might be needed if it became clear that mail volumes were moving to a "fundamentally 
different" level. 
In the meantime, NZ Post would "rigorously" tackle productivity in its core operations. 
It was also developing e-business initiatives to improve services to customers and to secure new income streams. 
Internet kiosks have been set up in some Post Shops, offering electronic bill payment and search facilities for electoral 
rolls, vehicle licence plates and addresses. "We see that's an area worth investing in for the future," Mr Toime said. 
 
 
Oil prices keep climbing as Kiwi dollar dips to record low 
  
HIGHER petrol prices seem almost certain with international oil prices rising to 10-year peaks and predicted to go higher, 
and the New Zealand dollar dipping to a record low yesterday. 
Oil prices in London rose to their highest point since the 1990 Gulf war at almost US$35 (NZ$84) a barrel yesterday, while 
United States prices rose even further, reaching US$37 a barrel at one stage. 
Even before the latest oil rise, one of 3 cents a litre for petrol was predicted. 
Early yesterday, the New Zealand dollar hit a record low of US40.7c, half a cent lower than the previous low of US42.2c 
hit a fortnight ago. Some observers believe the dollar could drop below US40c, though it recovered ground yesterday, 
ending about US41.4c. 
In Wellington yesterday, Australian BT Funds Management chief economist Chris Caton said the euro and the Australian 
and New Zealand dollars were all at record lows against the US dollar. 
"Everyone wants the US currency," he said. 
He also warned that oil prices could rise much higher. 
"This ain't over yet. Oil prices could easily get to the low or even mid US$40s," Dr Caton said. 
As the northern hemisphere winter approached, prices could rise because inventory levels were low and there was little 
spare shipping or refining capacity to allow increased production. 
Crude oil prices have risen 200 per cent from US$12 a barrel to US$37 a barrel during the past year or so. There had 
been three similar increases, in 1974, 1979 and in 1990. 
"On each of those three occasions the United States economy finished up in recession," Dr Caton said. 
History was not destiny, but the oil price rise was "daunting". He expected prices to fall back to US$25 a barrel in a year 
as new production came on stream. 
Manufacturers Federation president David Moloney said yesterday that the low dollar was "marvellous news" for 
manufacturers that processed local raw materials, such as some fish processors. 
Exporters, especially to the United States, had a real boost, with sales rising quickly. 
"The Americans don't tend to look at exchange rates, whereas the Brits and the Asians will know what the dollar is worth 
and say `what about lowering your prices'," Mr Moloney said. 
But import prices for manufacturing inputs had also climbed sharply. 
"The immediate euphoria of the low dollar is no longer looking so good _ the margins are shot," Mr Moloney said. 
For example, stainless steel prices have risen 75 per cent since September last year, reflecting the lower dollar and 
increased product prices. 
Zinc, petrochemical and plastic prices were also rising. Freight price rises were expected. 
ABN Amro chief economist Rodney Dickens said the immediate future for the dollar was uncertain but if the higher US 
dollar unwound to a "fair value" it could fall 10 per cent against the New Zealand dollar and the move could be fast. 
The group's official forecast is for the dollar to be back about US47c in a year, up significantly but still highly competitive 
for exporters, compared with a long-run average of about US59c. 
Even the large revision on Monday to the March year balance of payments deficit to $7.3 billion instead of the $8.5 billion 
first reported had not helped the dollar, Mr Dickens said. 
 
 
  Telecom dragged down 
  
  
 
TELECOM plunged to four-year lows yesterday, dragged down by an international global telecommunications sell-off. 
After falling as low as $6, it closed 15 cents down yesterday at $6.10, a level last reached in June 1996. 
Ord Minnett analyst David Wallace said the fall was not specific to anything Telecom had done. 
"The telco sector got a bit of a sell-off last night," Mr Wallace said. 
"Telecom and Telstra and Cable and Wireless Optus are all tracking down in line with it all." 
Global negativity toward the sector was driven by concerns about capital expenditure needed to upgrade infrastructure, to 
roll out third generation mobile telephone networks and huge prices being paid internationally for 3G spectrum. 
There had been a debt blowout in the telecommunications sector and investor concern about not getting good returns, he 
said. 
 
 
  NGC deal `will mean loss of $100m' 
  
 
DISSENTING Hutt Mana Energy Trust member Molly Melhuish says the trust is selling the 84,000 beneficiaries short of 
about $100 million if it decides by Friday to go ahead with a share swap deal with Natural Gas Corporation. 
The High Court yesterday rejected a bid for an interim injunction to stop the deal. The action was taken by two of the 
trust's beneficiaries, energy consultant Murray Cave and accountant Barry Brown. 
Mrs Melhuish said yesterday that a confidential report to the trust by Salisbury Group estimated NGC would reap a bonus 
of up to $300 million through a gain in value if it won 100 per cent of TransAlta. 
That was $52 million to $60 million in savings in head office costs and up to another $250 million gain in the value of gas 
infrastructure assets over their book value. 
The trust's share of that should be half _ $150 million _ or conservatively $100 million, Mrs Melhuish said. That was the 
value of the trust holding out, she said. 
"For the trust to be crowing about a $29 million premium is selling beneficiaries short," Mrs Melhuish said. 
NGC requires a decision about the share swap by Friday 5pm. It involves the trust exchanging its 14.6 per cent stake and 
its capital notes in TransAlta NZ for a 9.7 per cent stake in NGC. Acceptance by the trust triggers a general offer from 
NGC to the remaining minority shareholders in TransAlta. 
Mrs Melhuish's comments come as the trust issued results of a survey it said showed majority beneficiary support for the 
share swap deal with NGC. 
Respondents were asked if the trust should review whether it should wind up when required to do that in 2002, or be 
wound up now without the share swap, or do nothing and wait for a better offer. 
The trust said the most preferred option, with 44 per cent support, was for the trust to review winding up in 2002. Another 
23 per cent wanted the trust wound up now without going ahead with the share swap, and waiting for a better offer had 24 
per cent support.That the trust should resign now and call an election was rejected by 74 per cent. 
A total of 433 Hutt Mana residents took part in stage one of the two-part random telephone survey with 297 agreeing to 
complete the second stage. 
Trust chairman Jeff Berkett said the views of the silent majority were being heard through the market research. 
After the court decision Mr Brown and Dr Cave said their main concerns had not been to stop the deal but were about the 
way the trust had operated in the past few years and that would be debated at a substantive court hearing, likely this year. 
Other key questions still to be sorted out are who are the beneficiaries of the capital assets and the income of the trust. 
They may not necessarily be the same people. 
The trust may also still face a decision about winding up as it argued in court, and it was accepted by the court, that the 
trust deed envisaged it first make a decision on the disposal of the TransAlta shares and then decide on the winding up 
issue. 
* Court ruling p23 
 
 
  Spencer in charge 
  
Financial controller John Spencer is the new chief executive of New Zealand's biggest dairy company, Hamilton-based NZ 
Dairy Group. Mr Spencer has been with Dairy Group for seven years. 
 
 
 Property loss 

New Zealand property and technology investor Southern Capital reported a $1.39 million loss for the year to June, but 
said yesterday that underlying profits were solid. The company blamed the result on a $3.88 million loss on the disposal of 
an investment property that it obtained through a merger with CBD New Zealand. 
 
Chief appointed 
  
Foodland Associated chairman Don Humphreys said yesterday that Nick Lowe had been appointed chief executive of 
FAL's New Zealand department store business, Farmers Deka. 
 
Air cash deal 
  
 
Telecommunications company E-Phone has entered a memorandum of understanding with Advantage about the 
marketing and distribution of "air cash" within New Zealand. Air cash enabled pre-paid phone cards and other pre-paid 
and bill payment services to be bought and recharged from Eftpos machines, E-Phone said. 
 
Clear goes wireless 
  
Clear Communications has started a new wireless technology providing high-speed Internet access for business. Clear 
said it would will roll out a wireless network in main centres throughout New Zealand. 
 
 
Buyback taken up 
  
Advantage group said yesterday that it had fully participated in the buyback of Strathmore Group shares in return for an 
issue of shares in the CommSoft Group's initial public offering. Advantage had received advice that 5.94 million of its 
33.85 million Strathmore shares had been cancelled and 1.39 million CommSoft shares had been issued. 
 
 
Council in profit 
  
Christchurch City Council's holding company has posted a record annual net profit of $149.6 million. Christchurch City 
Holdings' interests include power company Orion, Lyttelton Port, Red Bus and Christchurch International Airport. 
 
Hong Kong flight 
  
 
Ansett Holdings said yesterday that it planned to start flying between Melbourne and Hong Kong from November 1, its first 
new international route since being taken over in June by Air New Zealand. 
 
 
Southern Cross in third bid for Aetna 
  
SOUTHERN Cross Medical Care Society has applied an unprecedented third time for Commerce Commission clearance 
to take over Aetna Health. 
The commission declined Southern Cross' first application last month because of dominance concerns in the medical 
insurance market. In its second application Southern Cross gave an undertaking that, if the proposal went ahead, it would 
sell several health insurance policies now held by Aetna. The commission was not satisfied. The third application includes 
a revised undertaking that, if the proposal went ahead, Southern Cross would divest all of the health insurance policies 
now held by Aetna. _ NZPA 
 
 
    Capital Properties gets a telling off 
   
 
CAPITAL Properties has been given a rap over the knuckles from the Stock Exchange Market Surveillance Panel for the 
way it reported its annual result. 
Panel secretary Philippe Leloir said yesterday that Capital Properties' preliminary full-year result showing a $13.1 million 
after-tax profit for the March year did not give a "true and fair" view. 
The panel believes it was "inappropriate" for Capital Properties to present a surplus of $13.1 million when its audited 
financial statements in the annual report showed a deficit of $6.6 million. 
The difference between the two figures is due to a $19.7 million writedown in the value of investment properties, which 
Capital Properties did not include in its consolidated operating statement in its preliminary announcement to the Stock 
Exchange. 
Capital Properties said the accounting standard for property companies clashed with the Stock Exchange appendix one 
reporting form. 
In order to comply with the standard, Capital Properties said it needed to detail changes to its property revaluations below 
the line. However, there is no line for this on the form. 
Capital Properties said it was told by the exchange not to change the form, but to fit its result within the structure, and it 
maintains that it complied with accounting standards in the way it reported. 
Mr Leloir said the panel had received two complaints about the Capital Properties announcement, and also had input from 
the Securities Commission. 
The panel accepted that the announcement as a whole complied with accounting standards. However, it was concerned 
about the consistency of reporting and had issued an interim guideline on how valuation changes should be treated. 
The panel has also recommended to the Stock Exchange that the reporting form be reviewed. 
Capital Properties chief executive Nick Wevers said yesterday he was happy with the outcome. He said the inflexibility of 
the Stock Exchange appendix one form had created the problem and he was pleased that was under review. 
 
BHP investment plan to keep Glenbrook steel mill open 
  
 
THE cloud over the Glenbrook steel mill has lifted with the plant's owner unveiling a $25 million lifeline that should ensure 
its survival for up to another 10 years. 
The investment by BHP New Zealand Steel is a lifeline for Waiuku, Pukekohe and the Franklin district where the mill has 
operated since 1967. The axe has hung over it for most of the 1990s because Australian owner BHP has been unhappy 
with its financial performance. 
Two years ago, the company renewed the mill's number one melter but also delivered an ultimatum to its 1400 staff that, 
unless performance targets were met, the mill would close by 2005. 
But BHP New Zealand Steel president Cyril Benjamin has announced approval had been given for the second melter's 
initial replacement design. It still needed final approval. _ NZPA 
 
Credit `passport' move 
 
  
 
CREDIT reporter Baycorp said yesterday it had started a service designed to simplify business transactions for New 
Zealanders travelling overseas. 
Travellers to Britain and Australia in particular were often frustrated by barriers to opening essential accounts on arrival, 
Baycorp said. 
Its "credit passport" provided a full credit history of an individual, along with a range of information from public sources, 
including the Companies Office, it said. 
The passport costs NZ$20. 
Baycorp last traded at $11.65 _ down 95 cents. _ Reuters 
 
 
  Union asks Government for help 
  
 
NEW ZEALAND'S largest union wants the Government to relieve financial pressure on households in return for worker 
restraint in wage negotiations. 
Speaking to about 400 employers yesterday, Engineering, Printing and Manufacturing Union national secretary Andrew 
Little urged the Government to become involved in maintaining reasonable wages for its 50,000 members. 
"The social wage is an important part of the policy framework, and we are entitled to expect some offsets for wage 
sacrifices felt by working people," he said. 
"The Government will need to be clear about what it's doing in areas of education, health and elsewhere to make those 
services fully accessible." 
In a speech geared toward highlighting the aims of economic sustainability and profitability between unions and 
employers, Mr Little said wage increases pegged to productivity improvements were "fully justifiable without creating 
pressure on inflation". 
He asked the Reserve Bank not to let the high price of oil damage the economy. 
"The union expects the Reserve Bank to recognise our responsible approach and to take it into account," he said. 
"In particular, we do not accept that the bank should respond to the external price shocks simply with its policies of the 
past." 
Mr Little also discussed contentious issues from the Employment Relations Act. 
He said the concept of good faith, which many employers have long felt could disadvantage them at the bargaining table, 
meant that in negotiations there should be "no surprises" between parties. 
While the Employers Federation and Council of Trade Unions were in talks over a code to measure a fair interpretation of 
"good faith", outstanding problems between parties on the concept would be referred to an independent reviewer _ paid 
for by the party claiming financial sensitivity. 
This person would decide whether information should be kept confidential. 
"There have been a lot of lies and propaganda about the Employment Relations Act _ we're concerned about the effect 
this has had on business and want to put it right," Mr Little said. 
 
Mana Trust deal challenge fails 
   
 
THE High Court ruled yesterday that there was nothing wrong in Hutt Mana Energy Trust members recommending 
support for the NGC takeover deal. 
Mr Justice Wild rejected a bid for an interim injunction to stop the share swap deal between the trust and the Natural Gas 
Corporation involving the trust's exchanging its 14.6 per cent stake and capital notes in TransAlta for a 9.7 per cent stake 
in NGC. 
Justice Wild ruled yesterday that: "All the plaintiffs' arguments for an order restraining the trustees from proceeding with 
the NGC deal have failed. They have failed to meet the threshold requirement of being serious issues for trial." 
The plaintiffs, Barry Brown and Murray Cave, had contended that the trust's consultation lacked balance and its support 
for the deal predetermined the outcome. 
For the trustees to recommend in the course of consultation that they support the NGC deal was not to predetermine the 
matter, Mr Justice Wild said. 
The trust's obligations were fiduciary _ to act in the best interest of beneficiaries. "There is nothing wrong with trustees 
advocating and supporting a course of action which they believe to be in the best interests of beneficiaries," he said. 
If they did not advocate and support the course they believed was in beneficiaries interests "then they might be in breach 
of their fiduciary obligations". 
Any merits of the NGC deal were for the trustees to finally assess and decide upon. The court's role was restricted to 
deciding if the trustees had lawfully _ that is adequately and properly _ fulfilled their fiduciary obligations to beneficiaries. 
He agreed with the trust's counsel, Robert Dobson, QC, that any approach to NGC to extend the time for trustees to 
commit to the deal was likely to involve a cost or possibly a flat refusal. He declined to direct or even suggest that the 
trustees seek an extension. 
He did not accept the plaintiffs arguments that the deletion of clause 23.2 in the original deed and the inclusion of clauses 
5.8 to 5.10 was unlawful and that the offer by NGC to the trust and to the shareholders was not a general offer. 
Justice Wild reserved decision for costs because he had not heard submissions. 
  
  Tower raises capital with two programmes 
  
TOWER has introduced the first of two capital markets programmes as part of a trans-Tasman funding strategy. 
The first issue was for $100 million and will largely be used to finance its acquisition of financial planning group Bridges in 
Australia. 
The first issue was in New Zealand dollars, of October 2001 notes at a yield of 30 basis points over the bank bill rate, and 
it will be swapped into Australian currency. 
Chief financial officer Keith Taylor said it was still cheaper to raise the money in New Zealand and then swap it. 
The company has $410 million of syndicated bank debt and could replace about half of that via the commercial paper and 
note programme. 
Westpac Institutional Bank was New Zealand lead manager of the inaugural NZ dollar issue. 
Both programmes will operate under similar terms and conditions, and will be guaranteed by Tower. Tower has a credit 
rating of BBB/A-2 from Standard and Poors. _ NZPA 
 
 
  Qantas NZ's secrets are out 
  
AFTER much speculation about the ownership structure and price paid for Qantas New Zealand, all is revealed on the 
airline's newly designed website and at the Auckland Companies Office. 
The price paid was $36.46 million through the issue of 48.6 million ordinary and preference shares. 
Previous owner News Corp had wanted close to $80 million. 
The shares were issued to a consortium through investment vehicle Zazu _ the name of the narrating bird in the Disney 
movie The Lion King. Company files show that 28 per cent of the shares collectively are owned by Australians, with the 
balance owned by New Zealanders. 
The biggest shareholder is Tappenden Holdings, the investment vehicle of businessmen Trevor Farmer and Alan Gibbs. It 
has 28.24 per cent, followed by Dunedin businessman Sir Clifford Skeggs's Skeggs Group, with 24.7 per cent. Syrna 
Holdings, an investment vehicle for Sovereign Assurance executives Ian Henry and Chris Coon, owns 15 per cent; 
Australian company, RM Williams (the trading company of Qantas New Zealand chairman, Ken Cowley) owns 12.345 per 
cent. 
Mr Cowley and Kenneth Parker of Sydney also own a further 6.171 per cent. Neriga (the investment vehicle for Australian 
media and investment mogul Kerry Stokes) owns 9.97 per cent and Greg Lancaster's Tranzaction owns 2.74 per cent. 
The rest of the shareholding is in tranches of less than 1 per cent, owned by organising broker of the consortium and 
deputy chairman David Belcher (.110 per cent), Qantas New Zealand boss Kevin Doddrell (.27 per cent), Bazoo Holdings 
(.092 per cent), which has Aucklanders Carl and Vivienne Peterson as directors, Tee Kay Investments (.073 per cent), 
which has directors Trevor and Vivieen Kerr, and South Auckland company Nelson and Simich Holdings (.137 per cent). 
Most of the shareholders (or their alternates) are on the board, including Mr Cowley as chairman and Mr Belcher as 
deputy chairman. A retired veteran of receiverships and liquidations, Fred Watson, is also on the board, though it is not 
clear if he has a shareholding in the airline through one of the holding companies. 
 
 
 
 
 
   
  No regrets for NZ's highest-paid corporate woman 

 [Theresa Gattung] 
  
Telecom chief executive Theresa Gattung is up with the big boys, earning $805,076 in the June year. She recently spoke 
to a women's group about her rise to the top. 
Tina-Marie Morrison reports. 
-------------------- 
'I believe that you regret in life what you didn't do, not what you did do. Whatever happens about what you did do, you 
learn from. You regret the paths not taken, so I thought 'right, if I don't do it now, I will never do it'.' Theresa Gattung 
Telecom Chief executive 
-------------------- 
AS A feminist in the top echelon of the businessworld, Telecom chief executive Theresa Gattung has not always found the 
going easy. 
Speaking to the New Horizons for Women Trust in Wellington recently, Ms Gattung revealed she once threw pornography 
at a management lecturer, was turned down for jobs because she is a woman, and has suffered stress-related health 
problems which prompted her to draw up a disciplined regime for her life. 
Ms Gattung, 38, says she has always been a strong feminist and believes big business is the last male bastion for women 
to enter. 
She has been at the helm of Telecom, New Zealand's biggest public company, for almost a year and says it has taken a 
lot of stamina and many knockbacks to get there. 
The appointment of a woman to the top job was greeted with much fanfare, but it came as no surprise to Ms Gattung who 
envisaged herself running a big public company when she was at university 20 years earlier. 
The oldest in a family of four girls, and educated at an all-girls school, she says she was not aware of gender 
discrimination till a mixed seventh form maths class where it was assumed the boys were better. By then it was too late to 
change her view of the world. "Rather than say I must have got it wrong, I said well they had got it wrong." 
Ms Gattung says she was fortunate to have a good start in life, and also feels lucky to have been taught by nuns in a 
single-sex school. Though she didn't always agree with them, she says they were fantastic role models. 
"They clearly ran the school, they were bossy boots, they were clearly frustrated spinsters in many ways, but they were 
just wonderful role models." 
Ms Gattung admits to being a typical "bossy" older child. She distinctly remembers a heated discussion about her last 
prizegiving where she was telling the school's headmistress, Sister Gertrude, how to run the show. 
"I got a bit of a rark over the coals from Sister Gertrude who quite rightly thought she knew what she was doing. I found 
out many years later she was one of the highest regarded principals of all time in the area and a very, very competent 
lady. She told me off for being so impertinent, and she said to me: `Theresa, you are not going to make a success of [it] 
unless you learn to be more patient'. 
"I thought she was going to say you are not going to make a success of your life, or your work, or your career . . . but she 
said you are not going to have a happy and successful marriage, [I thought] well I'm not bothered about that, so I won't 
change then." 
Ms Gattung, who has lived with her long-term partner John for the past 17 years, let slip that her choice of universities 
was influenced by where her boyfriend at the time was studying. 
"I don't usually admit to having these boyfriends in tow seeing as my goal in life is to live a self-determined life." 
She says she feels like an unusual mixture of the themes of her generation. At Waikato University, she felt like an alien in 
her suit at women's studies class, but also did not fit the norm in her management classes. 
"I remember being in management school, in a marketing studies class, and a lecturer handed out pornography as an 
example of direct marketing, and I was just outraged. 
"I picked this magazine up, and I hurled it at the front of the desk, at him, at his desk, and he was sort of gobsmacked, as 
were most of the blokes in the class." 
She went on to study law at Victoria University, something she had always had a "hankering" for. 
"I believe that you regret in life what you didn't do, not what you did do. Whatever happens about what you did do, you 
learn. You regret the paths not taken, so I thought, `right, if I don't do it now, I will never do it'." 
However, she says the reality of being a lawyer turned out to be a far cry from the romantic notion she had had as a 
schoolgirl. "I think the legal profession is the better for me never having joined it. 
"It was impossible for me to do the `on the one hand this and on the other hand that' _ I would never excel at that because 
I was always sure what the right answer was . . . and just really wanted to get on with things." 
Ms Gattung clearly does not want to be thought of as someone who has got where she has through privilege, pointing out 
that she was the first in a working class family to go on to tertiary education. 
She says her parents immigrated from England to give their family a better life, and her father, though "extremely 
intelligent", sacrificed formal education to support his family. 
Success in business and life is based more on mental attitude than on capability, she says. 
"I don't believe that people who appear to be successful have had an easier life. I think they have more persistently and 
consistently controlled the way they think about things. 
"You envisage what you want to be, you become that person by doing, by hard work, and then you get to have. I think a 
lot of people think life goes the other way. I don't think you can go from be, to have, without do. " 
Ms Gattung believes fear is the root of many problems, and she recommends a bold approach to decision making. 
"If you are uncertain or apprehensive it's very hard for other people to have confidence in you, so you have got to have 
confidence in yourself because otherwise no one else will. 
"I always try and execute with confidence because the worst thing that can happen is you're wrong, and if you're wrong 
you can remedy the situation. But I reckon that is so much better than not having tried at all . . . attitude leads behaviour." 
However, she has had many knockbacks in her career. She struggled to get a job as a marketing brand manager, and 
then in merchant banking. 
"I tried really hard to get a job in merchant banking and one bloke finally said to me, `we won't hire you because you are a 
woman'. 
"I must admit to a private feeling of `got what you deserved mate!', when that company later went out of business in the 
sharemarket crash _ maybe if you had hired from the whole talent pool of the population rather than just half, you might 
have done rather better!" 
Ms Gattung says blatant sexism is now very rare, but informal discrimination still exists. 
"My consistent message to groups of younger women is that when you encounter sexism, you shouldn't be surprised but 
nor should you let it knock you down. It doesn't mean you should accept it though. You have got to find a way through, 
over, around, under it. As my mentor Sharon Lord once said to me: when a door closes, go through the window." 
She believes having goals is important. 
"One of the great things about life is we get to be the actor, the director, the producer . . . we write our own script. 
"Having a dream or a goal simply means you can focus and make choices that take you closer to that. I think discovering 
what your dream is is probably the most important thing to do, but it is also incredibly frustrating because sometimes it 
doesn't come early in life." 
When she decided she wanted to succeed in big business, Ms Gattung began a clippings file of successful women and 
bought "every book I had ever seen on the topic". 
Personal favourites include: Talking From 9 to 5, They Can Kill You But They Can't Eat You, and How to Succeed in 
Business Without a Penis. 
"I have definitely never been a person who has drifted along and I must admit that I sometimes find it difficult to empathise 
with people who drift along hoping that something will find them because generally it doesn't." 
For her part, Ms Gattung almost drove herself into the ground to achieve her goals. She says she "completely 
underestimated" her workload while studying law and working fulltime. "I got quite stressed, which didn't manifest itself 
physically till a few years later." 
When aged in her mid-20s, Ms Gattung developed a toothache which lasted several months. She had several teeth 
completely drilled and filled, and "no end of pain". She was told it was all in her head. The condition was later diagnosed 
as temporomandibular joint syndrome, a disorder of the jaw joint, which required 18 months manipulative therapy by an 
osteopath. 
The experience prompted her to take her health seriously, and she set up a daily exercise regime with plenty of physical 
activity including a swim every morning, a weekly massage, no tea or coffee, alcohol only in moderation, and eight hours' 
sleep. 
"Some of these things have been a hugely important discipline for me as I have gone through the next 12 years." 
Ms Gattung says most of her reading these days is about achieving balance in life. "It's really hard to keep going if you 
don't balance physical, mental, emotional, and spiritual energies." 
As for life post-Telecom, Ms Gattung says she can't envisage herself moving into the chairman role like her predecessor 
at Telecom, Roderick Deane, or taking up board directorships. 
Her father, who retired from paid work at 48, has challenged her to do the same and put her talents into something else. 
Ms Gattung says she doesn't have that mapped out yet, but she is likely to make some sort of contribution to the 
community in a way that will still be challenging, and allow her to spend most of her time in New Zealand. 
 
BIL to hold briefing in NZ 
   
 
SINGAPORE-BASED and New Zealand-listed Brierley Investments will hold a shareholder briefing in Christchurch on 
October 30. 
BIL chairman Sir Selwyn Cushing will run the briefing and a presentation on BIL's recently issued annual results and the 
company's future investment strategy will be made. 
BIL holds 30 per cent of Air New Zealand, where Sir Selwyn is executive chairman, and the briefing has been organised 
to fit in with the airline's annual general meeting on November 1. 
BIL moved its headquarters and main listing to Singapore earlier this year. It was criticised by some of its 80,000 New 
Zealand shareholders for deciding to stage its annual meeting in the Bahamas. BIL's share price has come under selling 
pressure since the latest results were issued in August. They closed down 1 cent at 35c yesterday. _ NZPA 
 
House prices could fall 15pc in next 3 years 
   
 
NATIONAL house prices could fall another 15 per cent in the next two to three years as tens of thousands leave New 
Zealand, according to a study by broking house ABN Amro. 
ABN Amro chief economist Rodney Dickens said yesterday that net outflows could continue for the next two or three 
years, with new arrivals dropping off sharply just a couple of months after the election and the confirmation of a higher top 
tax rate. 
"In that environment [house prices] could kick down 5 per cent a year," he said, a total of about 15 per cent. 
In the early 1990s, house prices rose 38 per cent after accounting for inflation, but that leap was being undone "and could 
be largely undone", Mr Dickens said. 
More people had left New Zealand than new arrivals for the past two years _ negative net migration, and departures might 
keep rising, Mr Dickens said. 
In the late 1970s during a prolonged rush out of New Zealand, real house prices halved, but that was disguised. Modest 
house price rises were outstripped by general inflation, so real house prices actually fell. 
Mr Dickens said yesterday there were parallels with the present migration flows. 
House prices had fallen 5 per cent, after inflation, since arrivals slumped and departures increased, starting about two 
years ago. 
The migration outflow could continue for the next few years putting pressure on house prices, he said. 
There was a big inflow into Auckland in the early 1990s, pushing up prices and that was where the impact was also being 
seen when people left New Zealand. 
Recent Quotable Value figures showed house prices in greater Auckland had dipped in the past six months to June, with 
North Shore prices down 1.7 per cent and Waitakere down 1.1 per cent, though central Auckland prices were down only 
slightly. 
But in central Wellington house prices rose 5.5 per cent in the first half of the year, with Kapiti Coast prices almost as 
strong. 
Real Estate Institute figures out yesterday showed the Wellington median house price of $188,000 in August was up 
almost 10 per cent for the year. 
But as people left Auckland, that created job shortages and people were recruited from other parts of New Zealand, 
creating a flow-on impact in house prices, say in Southland. 
"It filters through to the rest of the economy," he said. 
However, farming regions were going well because of the low dollar and "they will keep going well", he said. 
Mr Dickens said government policies, especially the increase in the top tax rate to 39 per cent for income above $60,000, 
appeared to be the main reason for the net outflow of people this year. 
The top tax rate was an issue for skilled Kiwis considering a return to New Zealand, as well as other migrants. The top 
rate was still lower than in Australia, but there had been a material change in the attractiveness of New Zealand. 
 
Waltus merger action lodged 
  
A CLASS objection to a proposal to merge 27 Waltus companies was lodged with the High Court at Wellington yesterday 
on behalf of dissenting shareholders. 
The objection, in the name of financial adviser and Waltus investor Murray Weatherston and others, does not object to the 
merger itself. 
However, the objection says it should be conditional on Waltus buying the shares of those who did not agree with the 
merger. 
About 50 people have joined the class action, but if successful, it will cover all who voted against the proposal. 
The merger, which would create a company with $227 million of gross assets, was approved by 86 per cent of investors 
who voted at meetings two weeks ago. 
The objection argues that a merger would change the nature of the investment, and Waltus should be obliged to buy out 
those who do not wish to continue with the new company. 
A standard amalgamation includes automatic buyout rights for dissenting shareholders, but as High Court approval is 
required for the Waltus proposal, dissenting shareholders have to argue for the right. 
In its merger application to the High Court, Waltus lawyers Chapman Tripp said buyout rights were impracticable because 
debt securities were involved as well as shares. 
Buyout rights were also unnecessary because shares and notes were liquid and could be traded, they said. 
"There is therefore very little risk of shareholders being unable to leave the Waltus Property should they so desire," 
Chapman Tripp said. 
A High Court hearing on the Waltus proposal is set down for Monday. 
 
 
Small credit unions may stay tax-free 
   
 
SMALLER credit unions might enjoy exemptions from any new rules ending the long-standing tax-free status of credit 
unions, according to Commerce Minister Paul Swain. 
Speaking to the Association of Credit Unions conference in Wellington on Friday, he said the Government was looking at 
whether the across-the-board tax exemption gave credit unions an unfair competitive advantage over other financial 
service providers. 
"Credit unions have been exempt from paying income tax since 1891," Mr Swain said. 
"Nobody knows for sure why credit unions were granted that exemption." 
Questions of fairness were particularly valid after the Government this year raised the deposit limit for credit unions to 
$250,000 from $40,000. 
An issues paper seeking public submissions on the tax status of credit unions would look at three key areas, Mr Swain 
said. 
One was whether a minimum threshold should be applied to any new tax regime so smaller credit unions were not subject 
to income tax. 
"That would have the effect of recognising the unique nature of credit unions." 
The other issues were whether credit unions should be treated the same for tax purposes as other non-profit bodies that 
paid distributions to members and whether their existing exemption created a competitive advantage. 
Credit unions have criticised the idea they should be taxed, saying it could lead to their demise. And they have rejected 
suggestions they enjoy a competitive advantage over competitors. 
Credit unions could deal only with their members and not the public _ they were effectively a club, Association of Credit 
Unions chief executive Doug McLaren said. 
"If you consider it appropriate to tax credit unions on that basis, then you need to tax every club in the country." 
 
 
Employment act a landmine for employers 
 
ONE KEY area of the Employment Relations Act will be crucial for all employers, and particularly important for small 
employers. 
It relates to the process that must be followed when engaging staff. 
Staff will be able to be employed on a collective employment agreement or an individual employment agreement from 
October 2, 2000. 
Small employers will generally employ staff on an individual employment agreement, but they have to follow a very 
prescribed process if their agreement is to be effective. 
Where there is no collective agreement that covers the work done by the worker in question, and the employer wishes to 
employ the person on an individual employment agreement, key steps must be followed. 
Before concluding an agreement the employer must provide the employee with a copy of the intended agreement and 
advise the worker that the employee is entitled to seek independent advice about the intended agreement and give the 
worker reasonable opportunity to seek that advice. 
The intended agreement given to the worker must include the names of the employee and employer, a description of the 
work to be performed by the employee and an indication of where the employee is to perform that work. 
In addition, an indication of the arrangements relating to the times the employee is to work and the wages and salary 
payable to the employee must be covered. 
An explanation of the services available for the resolution of employment relationship problems, including reference to the 
90-day time limit for raising a personal grievance, must be included too. 
Following the return of the worker after they have had their opportunity to seek independent advice, the agreement will be 
finalised. 
Again, the individual employment agreement must be reduced to writing and must include the terms as set out above. 
The employer is not allowed to bargain unfairly with an individual for an employment agreement. 
Unfair bargaining includes circumstances where the worker was not given the information prior to being employed, or not 
given an opportunity to seek advice, as set out above. 
Other grounds for unfairness are where the worker is unable to understand adequately the provisions of the proposed 
agreement by reason of diminished capacity. 
Similarly, where the worker reasonably relies on the skill, care or advice of the employer or person acting for the employer 
or where the worker is induced to enter the agreement by oppressive means, including undue influence or duress. 
But the most common reason that employers are likely to be tripped up on when engaging an individual, is that they have 
not given them the basic information they are obliged to, along with an opportunity to take advice before entering into a 
contract. 
It is a landmine that will take many a limb. 
If an employer does engage in unfair bargaining, the authority may make an order that the employer pay the worker 
compensation, make an order cancelling or varying the agreement, or make such other order as it thinks fit. 
Accordingly, the employer could be up for compensation or could have the agreement varied and end up perhaps having 
to pay a higher hourly rate. 
The employee could complain that the hourly rate struck is well below the going rate, and if they had had an opportunity to 
talk to their uncle who is a union secretary, they would have learned that and not taken the job unless they got another $7 
an hour. 
It seems that they could ask the authority to vary their contract upwards by that amount, if the employer mucks up on the 
process. 
Alas, the authority could even award a penalty of up to $10,000 against the employer (if it is a company), or $5000 (if an 
individual). 
So, every employer needs to be very alert to their obligations in a procedural sense when employing staff. 
As with other parts of the act, the provisions governing the employment of new workers are very prescriptive and if the 
employer makes a process failure, it could be extraordinarily costly. 
The only advice one can give is not to make any mistakes. Get it right and be safe. 
I will cover other aspects of the new laws in subsequent articles. 
* Peter Cullen is principal at Cullen, a Wellington firm specialising in employment law. His column alternates with Brent 
Gilchrist's column on taxation. 
 
 
  Slump forces issue of currency union 
  
THE slump in the value of the Australian and New Zealand dollars against the greenback makes monetary union an 
important issue to consider, the Australian Financial Review said this week. 
The slump came amid growing angst about the international economic clout of both countries in a globalising world 
economy, making the issue even more timely, the AFR said. 
Both countries are debating whether there should be some sort of currency union, with options on the table including New 
Zealand adopting the Aussie dollar; an Anzac currency used by both countries; or both countries taking up the US dollar. 
The debate over currency union was reopened when Prime Minister Helen Clark, on a visit to New York last week, 
suggested formal work on the proposal might begin sooner than expected. 
Australian Treasurer Peter Costello said he would welcome talks on New Zealand using the Australian dollar, rather than 
creating a new currency for the two countries. 
The AFR said the benefits to New Zealand of a currency union were more clear because it had the smaller economy, 
which was feeling the loss of influence that comes with globalisation more acutely than Australia. 
There were two basic forms for a currency union _ under a new currency like the euro, in which all countries have some 
say in monetary policy; and what is commonly called dollarisation, where a small economy adopts a more powerful 
currency. 
Currency unions usually involved a broader political commitment by the member countries to a closer or indeed unified 
future in other areas of national affairs, the AFR said. 
"So far, most New Zealanders seem to be focused on a currency union in which the Reserve Bank of New Zealand would 
have a continuing role in a common monetary policy. 
"This is clearly not acceptable to Australia, which regards the creation of a new currency to accommodate one other 
country as unnecessarily wasteful and disruptive." 
However, the AFR said there were some benefits to Australia from sharing a currency. 
"The use of the Australian dollar in the two countries would reduce currency transaction costs, allow for a more efficient 
allocation of resources across a larger market and possibly help lift turnover in the currency." _ NZPA 
 
Global plunges chill buyers 
  
 
A GLOBAL chill in equities markets sent the New Zealand market 1 per cent lower yesterday and the barometer NZSE 40 
index plunged toward a renewed test of the 2000 barrier. 
"When the world goes down, we go down for sure," said Cavill White's Don Turkington. 
He said, relative to some markets, the NZSE 40's 19.98 point plunge to 2014.01 was "quite good". 
On Wall Street, stocks were knocked sharply lower after more warnings of less-than-stellar earnings from corporate 
America and sky-high oil prices had investors wringing their hands over slowing profit growth. 
Yesterday, the top 10 index ended 11.58 points down at 928.02 and the small stocks index fell 54.67 to 5320.72. There 
were just 32 rises against 81 falls among the 146 stocks traded. 
The market falls was not on heavy volume, with total turnover of only $68.2 million. 
Telecom plumbed fresh six-year lows of $6 but recovered in late trading to be 15c down at 610. The stock appeared to 
have a level of support at $6. It comprised $29.8 million of the turnover. 
Dr Turkington said he wouldn't be surprised to see the market rebound. 
"If the foreign markets were to have a breather and bounce then I wouldn't be at all surprised to see this thing pick up a 
little bit." 
Despite the combination of the fall in stock prices and the New Zealand dollar, he said there was little prospect of a 
rebound in negative foreign sentiment toward New Zealand investments. 
He said the euro had been battered similarly to the Kiwi and any bargain-hunting was likely to be conducted there before 
investors turned to New Zealand. 
Of the leaders, only Fletcher Energy stood against the tide. It closed 3c ahead at 895 as investors continued to punt that a 
takeover bid was imminent. 
Some of the market favourites took a beating, with moves exaggerated because there were few buyers to prevent the fall. 
Baycorp, for example, shed 95c to 1165 on relatively thin turnover of 84,000. 
Those to lose ground included Nuplex, 11c to 290, Air NZ As, 2c to 186, and the Bs, 5c to 270, National Mail, 10c to 75, 
PDL, 11c to 445, and Tower, 2c to 519. 
Among the few to buck the trend were AMP, up 18c to 2208, Natural Gas, 1c to 144, TransAlta, 7c to 279 and Sanford, 4c 
to 439. 

Kiwi rises from low 
  
 
THE dollar yesterday bounced off a record low set overnight at US40.70c as exporters and fund managers took 
advantage of its cheapness. 
The Kiwi finished at US41.47c, recouping its losses since Monday's nominal 5pm close of US41.42c. 
Deutsche Bank's Phil Lindberg blamed the Kiwi's weakness on the repetition of previous comments by Finance Minister 
Michael Cullen in Europe. 
However, speculators were also cited. 
Notwithstanding the bounce, dealers see the Kiwi trending lower to US40c, with little chance of a boost from a sustained 
turnaround in the euro or Australian dollar. 
Mr Lindberg said the apparent response to Dr Cullen's comments on the reasons for currency weakness was 
disappointing given a sharp revision to the good regarding the current account deficit on Monday. 
But the Kiwi wasn't alone in the doldrums _ the Australian dollar also plummeted to a low of US54.09c, the pound hit a 14-
year low of US$1.3962 and the euro struggled at US85.12c. 
Volumes were up in the afternoon but Mr Lindberg described the market as still skittish. 
The aussie recovered to close at US54.39c (US54.29c Monday). 
On the crosses, the Kiwi was at A76.25c (A76.29c), 44.31 yen (44.38), 29.48 pence (29.64), 0.9503 marks (0.9485), 
0.7395 Swiss francs (0.7397), and 0.4859 euros (0.4849). 
The trade-weighted index also hit a low at 47.76 during the morning. But it also regained ground, closing at 48.31 (48.30). 
The monetary conditions index finished steady at minus 868 and the 90-day bills ended at 6.66 per cent. 
Bonds were little changed except for some weakness at the long end. The February 2001s were at 6.59 per cent, April 
2003s at 6.84 per cent, November 2006s at 6.84 per cent, and November 2011s at 6.83 per cent. 
Meanwhile, the aussie hit a record low yesterday, for the fifth consecutive session. It had traded down to US54.08c 
overnight. 
Fund-related selling was behind the move, Westpac bank said. 
However, the aussie did find buyers under US54.25c but its recovery was slow, reaching a high of US54.42c. 
Its range has been ratcheting lower and lower and the trend remains downward, a dealer at an Australian bank said. 
The aussie finished at US54.30c from US54.43c at the close Monday. 
John Gajewski, in his weekly currency report for Commonwealth Bank research, said the aussie's decline should pause 
this week but eventually resume for a test of US53.20c. _ NZPA-AAP 
 

