Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including reaction to John Key's plan announced yesterday to sell up to 50% of Meridian Energy, Genesis, Mighty River Power and Solid Energy to the public through share floats.
Business and investing industry leaders are enthusiastic, saying it will give the NZX a much needed boost and provide much better choice for individual investors and local fund managers alike.
However, the Labour opposition and unions are against the plan, saying it may lead to higher power prices and increased foreign ownership of what are essentially monopoly assets.
Our poll running shows more than 50% oppose the plan. See my view here on Key's change of view and why selling these 4 SOEs may not be financially sensible.
Meanwhile, China announced overnight new measures to crackdown on surging apartment prices and inflation generally.
China's state council has announced a tightening of land supplies for developers, it has raised sales taxes on apartments sold after less than 5 years ownership and it has raised the minimum deposit to buy second homes to 60% from 50%.
This is all designed to curb speculation in property that has thrust prices well out of the reach of Chinese workers.
Meanwhile the battle to control inflation in the developing world continues in India.
It has increased its official interest rate for the 7th time since last March this week as it struggles to control a 16.5% rise in wholesale prices and surging food prices.
Onion prices in India are up 46% and Eggplant/Aubergine prices are up 62% over the last year. See more here.
America's efforts to print more of the world's reserve currency is spilling over into inflation in the BRIC (Brazil, India, Russia and China) economies. Their reaction to this inflationary surge is well worth watching in New Zealand, given growth in China in particular is crucial to keep demand up for our commodity exports.
The New Zealand dollar was little changed overnight, although the Dow passed through 12,000 and the oil price rose a bit on views the Federal Reserve will keep printing money.
Around 8.30 am the US Federal Reserve announced it would continue with its plan to buy back bonds (money printing) and keep interest rates near zero for an extended period. This was as expected.
8 Comments
Bernard : Your " Poll " as to whether JK should partially float SOE's onto the NZX , has 2 " No " options , one " Don't know " , and one " Yes " option .......
........ Skewered towards the negative , I reckon ......
.....Dust off your copy of " The Idiot's Guide to Running a Survey " ....... the one from the Roy Morgan office .
huh?.......... So the choice is yes; sell, no; dont sell, no; it will get bush wacked, or dont know; need more info or I dont care....pretty straightforward and easy to understand.....
I guess you could ask for yes sell 51% or sell 100%....but this isnt on the cards...Pollie "fear" comes to mind.
regards
Its certainly skewed, but by splitting the "no" vote its skewed towards the positive. You'll need to sum the 2 "no" columns to actually reach a final verdict.... which means its currently at 57% "no". Not a good sign for Key, considering the right wing bias of this site's reader's....
Crystal ball time....let's be silly and suggest the govt does return the budget to surplus post 2014...and begins to use the surplus to pay down debt...will an improved account not play into the socialists hands...surely Goofy Klinger and Cunny if they are still around, will tell the public Labour intends to hand out even more goodies for votes. They will be able to argue that tax cuts can go ahead...or that another new benefit can be invented...or both!
Clearly the govt will have to carry on cutting taxes once the accounts reach the point where Labour can play Santa and win the game. That is likely to mean a gst cut back to 12.5 after the 2017 election, or a cut to corporate and paye rates. Or indeed a rise in key benefits. Perhaps the govt will start paying into the super fund again. Certainly Labour will be spitting tacks as they see the economy being managed far better than they were ever capable of. It could spell the end for Labour as a main party.
A word of warning though...if the peasant's disposable incomes increase due to a gst drop or paye cut, the RBNZ will push the ocr higher to counter the burst in the money supply! Mortgage rates will rise!
Methinks that if they lose this year's election , Klinger will jump ship moments before Cunny sinks the sword into Goofy's back . ......
.... But over-all , your argument rings familiar bells ............. Around-and-around the big pollie porking wheel rolls ........ Everyone of them with a 3 year plan to tenaciously cling to power , or a cunning design to bribe the power back...........
Nowhere is there a 20 year vision for the future of the country , the citizenry , and the economy .
A "cunning" design or a cunny design!
If and it's is a big "if", National get a surplus, they will need to use it to begin to pay down the debt currently costing $120million a week to finance. At that time they will face a Labour pork promising spurge aimed at buying power. Somehow national will have to make the switch from clearing debt to boosting real incomes probably via tax cuts.
Unfortunately, the banks are secure as the landlords of the economy having trapped the govt and RB into providing the protection for their scheme. The banks are bleeding the economy of the wealth that would speed up the export sector growth and the potential for the country to earn a better future.
Do not expect any budget move to crimp the banking sector domination of the entire economy.
Fletcher Building may be lifting its Crane bid to get it over the line - http://www.theaustralian.com.au/business/city-beat/fletcher-building-cr…
Why is WINZ not actively putting unemployed Kiwi into jobs in aus...is it because too many have no qualifiactions and no skills and no experience and no desire to work? What is Key's position on this matter. A reduction in the real unemployment benefit cost would surely speed up the return to surplus and the labour sent to aus would develop skills that may be brought back to NZ later on.
Surely there are many who need the incentive of an end to the dole payments, before they will make the move. If it's heavy mining truck driving skills that are needed ...then train the buggers.
"Finding skilled labor for the reconstruction in Queensland, plus the flood-damaged eastern states of Victoria and New South Wales, may become more difficult. A mining boom, to feed China’s demand for raw materials, has caused a worker shortage at a time when the jobless rate is at the lowest level since January 2009"
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