Bernard Hickey talks with Marcus Lush on Radio Live at 6.50 am about Terms of Trade record high; Mediaworks rejecting sale talk; NZ Super Fund's 25% surge

Every weekday morning just after 6.50 am I talk with Marcus Lush on Radio Live about the latest news in business, markets, economics and personal finance.

I usually send through suggestions the night before or earlier in the morning. Sometimes we veer off into other areas or pick up on things that happen overnight.

But here's my suggestions as of 7.30 pm the night before. I'll update later with a link to the audio

Marcus,

1. We've never had it so good. Or at least that is what our terms of trade tell us. They measure the amount of imports we can buy with our exports. They rose 2.3% in the June quarter from the March quarter to a 37 year high. That means we can buy 2.3% more volume of imports with the same volume of exports. This is because NZ$ export prices in the June quarter rose 1.8% while NZ$ import prices fell 0.5%. So why aren't we booming? Why don't we seem rich. It's mostly because farmers are repaying debt and not spending the windfall.

See more here in our article.

Also commodity prices have come off since June and have fallen 12% in NZ$ terms since May, partly because of lower US$ export prices and a rise in the NZ dollar. See more here in our earlier article.

2. Ironbridge, the controlling shareholder of Mediaworks, which owns RadioLive and TV3, has slammed media speculation that it's in talks to be bought by SkyTV. It rejected a NZHerald report of such a meeting as a 'fiction'. However, banks including the British government controlled Royal Bank of Scotland and HBOS are players here, as is BNZ and Goldman Sachs. The banks are no doubt exerting pressure as they now seem to have a 20% equity stake as well as debt, records show.

New banking covenants come into force on November 30 and Ironbridge's Kerry McIntosh has acknowledged times are tough in the publishing and broadcasting game for those funded from advertising.

3. The NZ Super Fund has had a great year despite the latest markets meltdown. The fund made its biggest annual return since establishment eight years ago, making 25% after fees from riding the rebound in global equities. The value of the fund, which was set up to help pre-fund pensions for an ageing population, rose NZ$3.9 billion in the 12 months ended June 30, more than half the pre-tax returns it has made since its inception in 2003. That beat its previous best performance in 2005/6 when it made an after fees return of 19%.

The so-called Cullen Fund, named for architect former Finance Minister Michael Cullen, had $19.03 billion under management as at June 30, and has beaten Treasury bills by 2.23% since its inception, just 27 basis points below its target. See our article here.


cheers
Bernard

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(Updated with link to audio)