Final figures for the New Zealand leg of the Goodman Fielder float show it raised just $162 million (out of a total of $2.2 billion worldwide). If the big institutions were calling Graeme Hart's bluff when they said they didn't like the baking giant, then it may have come back to haunt them.
New Zealand demand has been reported to be more than $300 million, but a source calculates that institutional buyers accounted for just $43 million - well below what would be expected for a company listing straight on to the NZX-50.
In fact, our source estimates that institutions should have been in for more like $219 million to match Goodman's NZX-50 weighting.
Some post-float buying by passive funds (as they re-weighted) may account for some of the stock's strength since January 1.
Unsurprisingly, given his business hero status in this country, the general public showed faith in the smiley billionaire. The public pool came in at $4.3 million, which then had to be scaled back to $1.9 million.
Hart made no secret of his hope that local investors would embrace the relisting of the company, which was founded in New Zealand. But with less than 8 per cent of its value held here, it looks like he ended up doing the NZX a favour by dual listing.
In the candy store
If Hart's Burns Philp manages to flick off snack food business Uncle Toby's for the $1.3 billion that Aussie analysts reckon it's worth then the former food group will have $3.3 billion to burn this year.
Okay, that's less about $725 million of unsecured bank debt and about $212.5 million of capital notes, but when has Hart ever let debt levels hamper his plans?
The big question is: What plans?
Ratings agency S&P made it clear this week it was less than impressed with the "cashed-up" business model. It is keeping Burns Philp on CreditWatch with "negative implications" and says a strengthened cash position doesn't address strategic uncertainty.
There's one flaw in S&P's view: The uncertainty factor is one of Hart's great strengths. His purchase of Carter Holt Harvey was out of left field and odds are that Burns Philip's next buy will also be something completely off the radar.
Waste management? Aged care? Expect the investment to be unsexy, overlooked and badly in need of consolidation.
Rising Sun cooks kiwi
There are some powerful outside forces at work on the currency.
New Zealand dollar bonds still look as tasty as whale steaks to Japanese investors, who have snapped up nearly $1 billion worth this year.
Hopes that the kiwi might do exporters (and our current account deficit) a favour and commit hari-kari have been dashed as a fresh batch of Japanese housewives signed up for kiwi-denominated bonds.
Tourism tide turns
With visitor arrival numbers starting to confirm fears that the tourism sector has seen the last of the golden weather - or at least the Lord of The Rings-fuelled love affair with this country - Goldman Sachs JBWere has revisited the numbers on three related stocks.
Earnings forecasts for Auckland International Airport get a tweak downwards (between 1 per cent and 3 per cent over the next three years).
The airport has direct exposure to international passenger movements so the diminishing growth of tourist numbers was always going to be bad news. The stock still earns a valuation of $2.28; it closed at just $1.98 yesterday.
Air New Zealand - not exactly an investment for the faint-hearted at the best of times - gets a relatively positive assessment with Goldman leaving its forecasts for passenger numbers unchanged. That's because it sees the airline entering a market share growth phase based on its increased long-haul capacity. Other pluses for the airline include a solid cash balance (about $277 million) and a sizeable discount to its valuation. The shares get $2.05 valuation; they closed at $1.33 yesterday.
Tourism Holdings has already advised the market that 2006 is going to be a tough year. Lower numbers of backpacker arrivals and Japanese tourists in 2005 were bad news for the company, which owns coach services and tourist attractions.
But with those expectations already built into forecasts, the outlook isn't too bad, particularly with the troublesome Australian rental business starting to perform.
Goldman's 2006 profit forecast of $17.2 million (compared with $18.4 million in 2005) remains unchanged. And the 2007 and 2008 forecasts get small tweaks upwards - to $18.5 million and $20.8 million respectively. The shares get a valuation of $2.07 and were trading at $1.53 yesterday.
Fortunately for the sector, the drop in the growth of tourist numbers might be short-lived, Goldman economist Shamubeel Eaqub notes. A falling dollar and good economic growth in most of our source markets should provide some tail wind going into 2007.
Snottygobble spuds
The weirdest market announcement so far this year was made by Contact Energy owner Origin on the ASX: "Snottygobble 1 gas exploration well spuds." In plain English: Drilling has begun at Origin's charmingly named new well.
Sky high
One stock that is well placed for a good run in 2006 is Sky TV, says Forsyth Barr's Rob Mercer.
Sky has built a solid base of more than 650,000 subscribers and 900,000 satellite dishes on houses. And while TVNZ was up to its neck in political turmoil last year, the pay TV provider was busy making some smart moves - broadening its reach into all segments of the TV-watching market.
Its purchase of free-to-air broadcaster Prime has created good defensive and growth opportunities, Mercer says.
The introduction of My Sky (digital video recorders that let you pause live TV, record two channels at once and record at the touch of a button) has also added to Sky's potential customer base at the premium end of the market.
"That's going to be an important driver of Sky's value."
Actually, TVNZ blew it back in 2001 when it pulled the plug on plans for a digital TV service, Mercer said. In that period, Sky has more than doubled its subscriber base.
Forsyth Barr has a valuation between $7.18 and $7.29 on Sky TV. The shares were trading at $6.23 yesterday.
New Year hangover lingers
If you thought the traditionally lacklustre start to the trading year seems even slower than usual, you were right.
So far the market has been an average of 400 trades a day lighter than it was over the same period last year.
It's early days yet but the numbers don't make great reading going into a year that most analysts are picking to be a tough one on the New Zealand markets.
Goldman Sachs JBWere is the latest broker to pick that the NZX will be sluggish in 2006. It is tipping the exchange to trade between 3000 and 3500 this year (it was at 3359 yesterday). That's not much of an upside and plenty of downside.
Forsyth Barr is slightly more optimistic, picking 10 per cent growth. But it still notes that the NZX will underperform relative to international equities and suggests using the high kiwi dollar to buy some foreign stock.
Throw in the fact that ABN Amro chose "cash" as one of its top five investment picks for 2006 (link below) and it's starting to look pretty gloomy out there. At least the perennially optimistic Arthur Lim, at Macquarie Equities, isn't buying into the negativity. With the Government's student loan and family support packages still to take effect, he believes there is more spending left in the economy than people think. He notes that the latest Big Mac index (out this week) still rated the NZ dollar as under-valued.
<EM>Stock takes:</EM> Numbers of the beast
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