KEY POINTS:
Takeover talk continues to drive the market as we head into Christmas - some of it pretty long range, some of it more immediate.
Restaurant Brands is understood to now be in the "sooner" rather than "later" category. Chief executive Vicki Salmon has made no secret of the fact that the company has been approached but it seems lawyers for a private equity player are busily munching their way through the fine print of its licensing deals.
Restaurant Brands shares closed up 1c at $1.13 yesterday and have risen 7c in the past 10 days.
Contact Energy shares have soared through the magic $8 mark on talk out of Australia that energy company AGL may be sizing up Origin - Contact's Australian parent company.
Origin still owns 51 per cent, so if it gets a new owner then so does Contact. There are plenty of Contact shareholders who would argue that might not be such a bad thing after the unpopular merger deal Origin tried to foist on them this year. Of course, what AGL may do with its Contact stake is anyone's guess. Contact closed up 22c at $8.28.
A longer-term tip is that French-US construction industry monolith Lafarge may take a serious look at Fletcher Building in the new year. The world's No 1 cement and roofing supplier with a market cap of $38 billion, Lafarge has several billion up its sleeve to spend and a healthy appetite for new markets. This week its chairman, Bertrand Collomb, played down the construction slowdown in the US by saying Lafarge was well buffered by its investments in new markets such as China and South Africa.
Market talk centres on the fact that Lafarge has a strong relationship with Australian construction firm Boral. Boral was linked to Fletcher Building takeover speculation in October, so ... well, you know how it goes: One and one and one make four.
Still, the logic is compelling, particularly when you consider what a dominant Australasian player a merger of Boral and Fletcher would create. Fletcher Building closed up 11c at $10.90 yesterday.
4000 and rising
A late run on Telecom shares has also helped to drive the NZX-50 past the much-talked-about 4000 mark. The stock looks likely to end the year close to $5, giving Theresa Gattung and her helper elves more reason for cheer than they could possibly have hoped for a few months ago.
The 4000 figure is certainly a nice one to celebrate but looking back to 1987 provides a healthy does of reality. The NZX-50 is now a gross index, which means dividends are factored back into the growth. A comparison with the dizzy pre-crash heights of 1987, on a capital index basis (ie, pure share price growth) shows the market has some way to go. On September 30, 1987, the capital index (for all companies) was at 1313 compared with just 1137 yesterday - a difference of about 15 per cent. The market cap of the entire exchange in September 1987 was $48 billion compared with $42 billion now.
Of course let's not forget that - as a general rule - the companies on the market now are considerably more financially robust than those that sprang up in the 1980s.
And the positive spin on this is a reason to hope that the NZX still has plenty of growth left for the year ahead.
Telecom shares closed at $4.89 yesterday - up 39c since December 7.
Christmas Ploy
Beware of unsolicited offers of cash for Christmas. An Australian scheme appears to have migrated across the Tasman.
New Zealand shareholders of Nufarm have received a personalised letter offering to buy their shares.
The catch is the price - the offer is less than half the current value of the shares.
There is no law against someone making a low offer and, on the face of it, it looks laughable. But in Australia these schemes are used to target the elderly and those who don't take an active interest in shares they might have inherited.
Nufarm has confirmed it is aware of the scheme but under Australian law it is required to provide a copy of its register to those who request it in writing.
After one such request this month, the company became suspicious and says it has sent warning letters to shareholders.
The low offer comes from a company called Colonial Capital Corporation.
The company's office website shows the director to be David Tweed of Victoria.
Nufarm closed at $10.19 on the ASX last night. The Colonial Capital Corporation offer was for a generous $5 a share.
Golden Ticket
For those in the game of analysing the fortunes at Guinness Peat Group, talk this week about a junket to the inner workings of the Coats business in China has an air of Willy Wonka's Chocolate Factory about it.
The analysts are certainly excited. GPG has never spun too many yarns about the 100 per cent-owned threads business, which accounts for 40 per cent of its investments. GPG executive director Tony Gibbs says a trip is being planned, but is in the early stages.
"At some stage we'll take some analysts up to China. It will blow them apart with what we've got there. You see a million-square-foot plant making zips and winding thread and it's a sight to see."
Coats has plants in Guangzhou and Shenzhen as well as some near Beijing and Shanghai.
It also has huge operations in Vietnam, Bangladesh, India and through South America. It has operations in 68 countries.
Macquarie Equities investment director Arthur Lim says: "We are picking GPG to perform in 2007 on the back of a turnaround on Coats' profitability. [Coats] is an asset which has held GPG's share price back in the past.
"Also, the new offshore tax regime will benefit GPG, and with the NZ dollar at current levels GPG is a currency play as well."
Lim reckons it is also a good sign when an investment company is keen to show off an asset to the investment world.
NZXmas wishes
Twas the week before Christmas and all through the nation,
was a sense of achievement and an air of elation,
The markets were booming, the downturn retreated.
Exports improving, house prices re-heated.
But self-confessed grinches, messieurs Bollard and Cullen,
quaffed back their egg nog, increasingly sullen.
"The deficit's still nasty, the exchange rate's no good.
The engine is smoking - just look under the hood."
The consumers weren't listening, the brokers just smiled
the private equity players weren't the slightest bit riled.
Graeme Hart poured a shandy, out on the high seas.
This year he's got wrapping but has sold all his trees.
"The Swiss bid's been launched, a new takeover brewing
I'll take it all private, watch the money accruing."
In the Telecom towers Theresa turned out the light,
just glad she's still standing after the unbundling fight.
Her annus horribilis was all but complete.
"Annette got the boot, At least I've been discreet!"
Down at the Red Shed Stephen Tindall was scheming,
though Tescos and Woolworths might tell him he's dreaming.
"Next year I reckon I'll sell the whole thing,
grow my hair long and invest in Ginseng."
High in the sky Air New Zealand was soaring,
its shares on a roll, Government owners adoring.
Rob Fyfe was relaxing, plotting world domination
the codeshare forgotten, but not his frustration.
"All over the world the airlines are merging
but not in New Zealand despite all my urging."
At the GPG office Tony Gibbs led a toast.
He'd upset Stiassny, earned a public riposte.
He'd altered the tax law, divvied up Tower,
more proof if its needed, of mandarin power.
So with Santa upon us and the holidays here,
to investors and traders: Merry Christmas, good cheer.
And let's all raise a glass, touch wood, say a prayer
that this bloody good bull run continues next year.
*with apologies to Clement Clarke Moore
