KEY POINTS:
From the news pages of the Business Herald: "Exporters want the Reserve Bank to lower interest rates to take the heat out of the currency."
Something from this week? No, January 2003 actually. At that time the dollar had just topped US52c and exporters were all about to
go out of business, according to several highly vocal business organisations.
Serious fears were being expressed that the dollar might soar as high as US60c - with devastating effect on the economy.
The point here is not to play down the pain that many exporters are suffering but to consider how much better the business world is doing with the kiwi at US80c than would have been dreamed possible four years ago.
Yes, the currency is too high now but New Zealand is a wealthier country relative to the rest of the world and our expectations about the right levels are considerably more optimistic. A sudden return to US52c could be scary indeed.
Putting it on plastic
After six months in the doldrums - unable to get above 30c a share - somebody likes the look of Genesis Research.
On July 12 the company reported its organic fuel division BioJoule had found a way to make expanded polyurethane foam from natural lignin it extracts from shrubby willow. The stock is up 26 per cent since its close on July 12 and 40 per cent since the start of June - albeit on predictably thin trading. With US interest in petroleum alternatives at an all-time high, someone thinks it's time to take a punt. Genesis eased 2c to 34c yesterday.
Origin v Contact
A reader points out that last week's item on the spectacular rise in value of Contact shares - since last year's failed merger deal - didn't mention how much Origin shares have risen over the same period.
Contact has done very nicely on its own, up 37 per cent in the past 12 months. But Origin has also risen - 28 per cent in the past 12 months, to be exact.
With Origin owning 51 per cent of Contact, it's not surprising there is a link between the relative returns.
But the point of last week's item was to respond, a year later, to the letter that the independent directors sent to shareholders shortly after the deal was rejected.
That letter - sent as the share price dropped back - suggested that shareholders had destroyed value.
We'll never know for sure what a merged entity might have achieved in comparison. But with Contact shares topping record highs again this week, it is unlikely that those shareholders who voted no on the merger are regretting their decision. Contact shares closed up 11c at $9.65 yesterday.
Pike spike
Before listing there were fears that Pike River might have slightly overplayed its hand by raising the full $85 million in its IPO this month. With local demand satiated, the stock has drifted back below the $1 issue price this week. That shouldn't really matter a lot to serious investors.
Surely everybody knew this was a long-term investment dependent on the successful extraction of coal and meeting key deadlines that don't really kick in until early next year.
So it does beg the question: who would sell out at a loss just days after listing?
Most of the selling is from overseas. So it looks like there were a few funds which made the mistake of assuming Pike would follow the trend for Australian mining stocks and soar on listing.
When that didn't happen to any great degree, they have cut their losses early.
Pike shares closed steady at 94c.
Market moving After a lousy June the NZX-50 is back in the black, nudging record highs above 4330 this week. But let's not count our bulls before they've run. For three months volatility has been the only constant. The NZX-50 has been above 4300 three times since May but has also been below 4200 three times.
Retail blues
With the focus still on the potential takeover of The Warehouse, the day-in, day-out realities of retail trading have taken a back seat for market watchers.
But a heavy profit warning by Briscoe Group last Friday shows things aren't easy out there. Briscoe, which operates the Briscoes Homeware, Rebel Sport, Living & Giving and Urban Loft brands, said profits for the six months to July could be up to 15 per cent lower than the same period last year.
The warning saw Briscoe's shares cop an immediate hit. They have crept back to close at $1.56 yesterday. But the factors contributing to lower profit are industry-wide, writes Rodney Deacon at Goldman Sachs JBWere.
"We believe that once Briscoe is through the worst of the impending cyclical downturn and has fully integrated Living & Giving, it could experience improved share price performance."
But he warns that positive news on that front is still some way off and the risk in the near term is skewed to the downside.
Deacon maintains his marketperform/hold recommendation on the stock but drops his valuation from $1.66 to $1.53.
Honey hopes
Health product exporter Comvita pulled off a coup this week, getting US Food and Drug Administration approval for its manuka honey antiseptic wound dressings.
In the pharmaceutical world, FDA approval for a product is the holy grail. This isn't in the same league as getting a new drug approved but it does allow Comvita to launch a niche product into the US$2.3 billion advanced wound care market.
Comvita stock is hardly at bargain prices right now so the news hasn't sent the shares soaring but the achievement opens another door to big returns somewhere up in the blue skies.
Michelle Perkins at ABN Amro - one of the few analysts to cover Comvita - has a hold recommendation on the stock and a target price of $3.24. The shares closed up 10c at $3.50 yesterday.
Putting New Zealand on the map ...
At the risk of succumbing to "little old New Zealand syndrome" and treating every bit of international news coverage like a penny from heaven, it is interesting to Google the Auckland International Airport story and see just how much attention it is getting.
As a business deal it is roughly of the same scale as The Warehouse sale or the Carter Holt Harvey takeover but relatively speaking, global interest is off the Richter scale.
A quick Google search turns up about 400 news stories on the topic.
From the Wall Street Journal, Forbes and BBC to the Lebanon Daily Star, Khaleej Times and Hindustan Times - this is up there with Shrek the sheep.
There's a couple of key reasons: primarily, intense interest in every investment move that Dubai makes.
The oil-rich emirate has money to spend and is serious about creating a global business empire.
Airports are the latest intriguing piece of the puzzle and Auckland is Dubai's first play for an airport of any size.
Secondly, as the Australian put it, this deal sets a new benchmark for valuations on airports.
At a multiple of 21 times ebitda (Macquarie Airports trades on a multiple of 16) the deal looks rich - on paper at least.
That didn't stop some Australian fund managers hinting that they expect to see Dubai raise the offer.
... or not Meanwhile a professional cynic points out this Dubai Aerospace Enterprise didn't do quite such a good job of putting New Zealand on the map in its Power Point presentation to media and brokers this week.
Okay, a blobby little single island state does feature off the coast of Australia roughly where New Zealand should be. But given that the slide in question was showing off the Emirates airline's impressive international reach it's a pity they forgot to extend any of the dotted lines as far as Auckland.
