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A review of things you need to know before you go home on Thursday; UDC out-offers parent ANZ, fracking guidelines, big trade surplus, high NZGS demand

A review of things you need to know before you go home on Thursday; UDC out-offers parent ANZ, fracking guidelines, big trade surplus, high NZGS demand
27th Mar 14, 4:00pm by David Chaston
For Thursday, March 27, 2014. <a href="http://www.shutterstock.com/">Image sourced from Shutterstock.com</a>

Here are the key things you need to know before you leave work today.

UDC RAISES TERM DEPOSIT RATES
This ANZ subsidiary has raised td rates by between 10 bps and 35 bps. Interestingly, their longer term rates are substantially higher than parent ANZ's. ANZ is offering the best bank rates for these terms. It may or may not signal that ANZ is about to raise its term deposit rates again. Why invest at ANZ for 5 years at 5.75% when you can get 6.35% from UDC ?

'ENVIRONMENTALLY RESPONSIBLE DEVELOPMENT'
The Government has today released new guidelines local authorities must use for fracking in New Zealand.

LATEST GOVT BOND HEAVILY OVERSUBSCRIBED
Latest bond tender of NZ$200 mln received bids for NZ$773 mln achieving an average weighted yield of 4.37% (previously 4.29%).

EXPORTS UP, IMPORTS DOWN
Booming exports of dairy products help our lift trade surplus to $818 mln in February, a record for that month. Most years, the surplus grows in March and April, so the full year may be a very good one.

MORE AUCKLAND RESIDENCES COMING
The first report on the Auckland Housing Accord shows they are on target to achieve their ambitious first year goals, which will confound a few analysts who thought they were aspirational when set.

WHOLESALE RATES
Swap rates gave up some of their recent gains today with most of the retreat at the long terms. The 90 day bank bill rates however were up 1 bps again today and now at 3.11%.

OUR CURRENCY
Similar to yesterday, the NZ dollar flat lined for most of the day, but rose sharply starting at 2pm. Not sure why yet. It is up 30 bps in 100 mins so far. The NZD is now up to 86.2 USc, 93.4 AUc, and the TWI is now at 80.3.

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7 Comments

by  Colin Riden  |  27th Mar 14, 6:24pm 1395897848

I would have thought the main news of the day was Trustpower (the major private investor) walking away from the Ruataniwha Water Supply Scheme.

 

To quote their media release: "Trustpower announces that it has decided to withdraw as a potential investor in the RWSS. Trustpower has determined that it will not be possible to invest within its risk and return framework for a project of this nature."

 

And that despite the scheme expecting very significant government subsidies via low interest loans from Crown Irrigation Investments Limited. Plus other subsidies from Hawkes Bay Regional Council via low returns including from discounted water prices.

 

RWSS may be the government's model for future irrigation projects but it is not a viable investment proposition.

 

To quote Treasury to the Minister of Infrastructure on irrigation projects including Ruataniwha: "It would also be helpful to make it clear that the government's involvement would be on a fully commercial or equal basis with other investors. Any indication otherwise would simply incentivise scheme promoters to focus their efforts on maximising the level of subsidy being provided through cheap finance."

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by  Kate  |  27th Mar 14, 7:35pm 1395902145

Great result. I suspect Ngai Tahu will make an announcement tomorrow.

Makes a joke of Key's Minister's who trotted out support.

Shame the good folks of the HB had to cough up all the costs of funding the fiasco so far.

 

 

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by  Colin Riden  |  28th Mar 14, 12:40pm 1395963601

Not sure about the announcement but it seems unlikely that HBRIC presented its business case to HBRC on Wednesday and then Trustpower made the decision to withdraw from the scheme the following day.  

 

The RWSS business case makes no mention of Trustpower or Ngai Tahu but does mention other potential investors.

 

It is possible HBRIC presented its business case to Council knowing that it didn't have any institutional investors on board.

 

Infratil's 2013 interim report suggests Trustpower was HBRIC's preferred investor:

it was selected by the Hawkes Bay Regional Council development company as its preferred partner to work on the development of the $265 million Ruataniwha generation and irrigation scheme.

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by  Andrewj  |  28th Mar 14, 4:38am 1395934701

The disconnect between the realities of farming and those making decisions at the HBRC is frightening.

 Whats more, rather than do some decent analysis the board just ups the CEO's pay by 80k a year and tries to keep the spin coming.

 Im in this scheme and the economics are appaulling. It never should have got past the starting block. Whats more they changed my bore consent from 10 years to five charged me the same as the ten year renewal and left all bore uses facing a uncertain future, forcing us onto the new dam scheme.

The mismanagement of bore consents at the Regional Council should have been addressed years ago. Its mainly the fault of councilors who interferred with the consent process to enable large scale irrigated dairy farms to happen, and management thinking we need growth at all costs, screw the economics let the banks handle that.

Heads need to roll, at the top.

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by  cowboy  |  28th Mar 14, 7:24am 1395944670

such news isn't making it through to the people these days.  Lots of stuff happening in the world last 3 weeks. big stuff.  Wouldn't know about it if you just read NZ newspapers.

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by  Colin Riden  |  28th Mar 14, 10:14am 1395954863

Agreed. But there are good explanations out there if you know where.

 

Even thought this article doesn't know about Ruataniwha it brilliantly summarises the scheme's management culture:

http://www.oftwominds.com/blogmar14/sociopaths3-14.html

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by  Kate  |  27th Mar 14, 7:41pm 1395902517
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