Archive for December, 2010
As another year passes I put on some of the biggest hits of the year. First up is my 2 year old son Liam’s favourite artist Justin Bieber with Baby:
Next up is Lady Gaga’s Bad Romance:
Finally my wildcard pick is comedy team The Lonely Island with I’m on a Boat:
I trust that you all had a very Merry Christmas and have been enjoying the feast of cricket lately. The Auckland Aces have waltzed into the HRV Cup 20/20 domestic final as top qualifiers. As a result Auckland will play Central Districts at 2:00pm on Sunday 2 January 2011 at Colin Maiden Park, Glen Innes in Auckland. Black Caps 20/20 cricket victories over a skilled Pakistan side. I am a massive cricket fan and have also been enjoying the Ashes test series in Australia, so congratulations to England on retaining the Ashes for the first time in 24 years after their massive victory by an innings and 157 runs. This was England’s biggest win over Australia in 44 years, with Australia skittled on Boxing Day for just 98 runs in front of a crowd of over 84,000 people. Then on the same wicket and day England were 157 for 0 at stumps. The rest of the test was a mere formality.
England celebrate the last wicket to retain the Ashes. Photo: Getty Images via ESPN CricInfo
Now questions are being asked as to the competence of Australia’s captain, Ricky Ponting, a great player with an amazing record, their players, their coach and their selectors. Australia have slipped to 5th in the Test Cricket rankings and have to regroup by Monday to try to win the 5th and final test in Sydney to save face. This will not be an easy task as it is a spin friendly track and the wounded Aussies are facing the number 1 ranked spinner in the world currently in Graeme Swann. This test will be good viewing.
Share Offer Scam by Carlyle Securities LP
I got an “interesting” letter in the mail today from Carlyle Securities LP offering to buy my shares around 40% of their market price! How rude of them!! Family members have received letters for various companies their Trust’s hold shares in. Basically the offer comes with a letter on white A4 paper, and an acceptance form on off-white/cream coloured A4 paper that looks official with a barcode on it that quite probably doesn’t even work. The letters are titled “cash offer for {Insert NZX listed company name} shares”, eg. Cash Offer for Telecom Corporation of New Zealand Limited Shares.
Now unlike property which is less liquid when it comes to selling and price and presentation are determining factors, you don’t have to sell shares in large and frequently traded companies like Fletcher Building, Telecom, Contact Energy, Vector, GPG, etc. The sharemarket sets the price for the market of shares. You can simply sell them at market price through a broker account (setting one up is easy if you don’t already have one). For example go to ASB Securities, Direct Broking or numerous other account sources with varying degrees of assistance and fee structures and set one up.
Then if you are thinking of selling these Blue Chip shares that incidentally have quite high dividend yields too, instead of selling them at a huge 30 – 50% discount to their market price, show some financial competence by selling them yourself. Carlyle Securities LP has “cute” timing with this offer in that it was sent out 2 days ago on 27 December 2010 and expires at 6:00pm on 7 January 2011. The Securities Commission is not working until 10 January 2011. Then they will pay you by posting a cheque for the greatly reduced amount within 21 days.
So do NOT accept Carlyle’s offer as:
- it is a huge discount to market price (you would be eroding your wealth by accepting it as this market price is a price that you could achieve yourself very readily by not responding to the offer and then selling your shares through a NZX broker. I would note that the market is largely asleep over this period and price movements in these Blue Chip stocks are likely to be minimal)
- you would be paid far faster through a broker (in three working days, rather than 21 calendar days of receipt by Carlyle Securities of notice that the transfer of your shares into Carlyle Securities name has been registered!)
I had heard of the Carlyle Group before, but something tells me that with 440 professionals in 19 offices that they would not be renting by the month using Servcorp’s serviced offices on Level 20 of the ASB Bank building. The real person behind Carlyle Securities is Bernard Whimp who was banned from being a director in New Zealand for 4 years in October 2006 for serious breaches of the Companies Act and mismanagement of registered companies. He is using the Limited Partnership regime (which Company Director bans don’t apply to) to make these extremely low offers that will no doubt catch a few people who don’t know where or how to up share prices. Just make sure that you are not one of them!
Dr Alan Bollard the Governor of the Reserve Bank of New Zealand has left the Official Cash Rate (“OCR”) unchanged at 3.0%. Whilst this came as no surprise to financial markets, his comments on our economy’s recovery and when the OCR would next be raised where a little bit surprising.
Property investors, exporters and business owners can take some comfort in Dr Bollard’s bearish comments about when the OCR would next be raised as this is now not likely until the June or more likely even the July announcement. As a result floating rates and shorter term fixed rates are likely to remain unchanged for a few months yet. Towards the middle of 2011 I predict the fixed rates to start creeping up and the floating rates to rise along with the OCR.
The full text of the Reserve Bank Governor Alan Bollard announcement as sourced from the Reserve Bank website is below:
Interest rates are now projected to rise to a more limited extent over the next two years than signalled in the September Statement.
The pace of economic growth appears to have moderated. Corporate investment intentions are now below average. Household spending also remains weak, with household credit still flat and housing market activity slowing further. House prices may decline a little further in the near term. This continued household and business caution suggests current low interest rates are having a less stimulatory effect than in the past.
On the positive side, activity in New Zealand’s trading partners continues to expand. Growth in the Asia-Pacific region remains strong, and growth in the US and UK has turned out a little stronger than was projected. Consistent with this, export commodity prices, which were already very high, continue to increase. While this is encouraging, downside risks to global growth and export prices persist.
Repairs to earthquake damage in Canterbury are expected to add to GDP growth over the projection period. The earthquake appears to have caused about $5 billion of damage to infrastructure, and residential and commercial property.
While the near-term outlook for GDP growth has softened, beyond this, higher export volumes and earthquake repairs are expected to push GDP growth above that projected in the September Statement. As growth recovers, current spare capacity will gradually be used up, causing underlying inflation to pick up. More immediately, the recent increase in the rate of GST will cause headline CPI inflation to spike higher temporarily, although there is little evidence of this spike affecting price and wage setting behaviour.
While interest rates are likely to increase modestly over the next two years, for now it seems prudent to keep the OCR low until the recovery becomes more robust and underlying inflationary pressures show more obvious signs of increasing.
The New Zealand dollar has appreciated significantly since the September Statement. Sustained strength in the currency is inhibiting the rebalancing of economic activity towards the tradable sector. Accelerated elimination of New Zealand’s fiscal deficit could help improve national savings, thereby easing current pressure on interest rates and the New Zealand dollar, and reducing New Zealand’s dependence on international borrowing.”