Jan. 18 (BusinessDesk) - Jan. 18 (BusinessDesk) - The consumer price index (CPI) fell unexpectedly by 0.2 percent in the last three months of last year, raising the likelihood of either a central bank interest rate cut or a longer period of current historic low interest rates.
The New Zealand dollar immediately fell on the announcement at 10.45 am to 83.52 US cents from 84.15 cents just prior to the release and was trading at 83.60 US cents shortly after midday.
Market expectations had been for a 0.1 percent increase. The annual inflation rate for calendar 2012 was 0.9 percent, up from 0.8 percent in the year to September.
That means inflation continues to fall just below the bottom end of the Reserve Bank of New Zealand's statutory target range of 1 to 3 percent annually over the medium term under its Policy Targets Agreement with the government and may increase pressure for a cut to the Official Cash Rate.
Current conventional wisdom is that the RBNZ will not cut the OCR again, but is unlikely to raise it from its current historic low point of 2.5 percent.
Meridian cans hydro scheme )
Meridian Energy is canning its planned North Bank hydro project on the Waitaki River for the foreseeable future, saying it is uneconomic in the current flat electricity market.
The announcement in the latest of a string of decisions either to pull back from possible investments or to shore up the Meridian balance sheet, with the state-owned enterprise slated for partial privatisation, possibly before the end of this year.
"Like other generators we recognise that the demand outlook for the next five years is probably flat to slightly declining," said chief executive Mark Binns.
Meridian had projected the 260 megawatt scheme
would generate enough electricity to power 140,000
"This is probably the best large-scale hydro opportunity left in the country," said Binns, and it wouldn't be abandoned completely. "We're sitting on our hands but we're not walking away from it. I would be surprised if we weren't looking at it again before 2020."
Meridian already owns and operates six hydro stations along the Waitaki River.
New Image seeks delisting through takeover
New Image Group's chairman Graeme Clegg is moving to take the colostrum-based health tonic maker private, saying a sharemarket listing no longer makes sense for the company.
The company has received a notice of a takeover at 26 cents a share from New Image Trustee Ltd, a company controlled by Mr Clegg, who already owns just under 70 percent of the company.
The company was originally listed as Selector Group 13 years ago. Clegg says in the takeover documents that a listing on the New Zealand stock exchange no longer made sense.
"In simple terms, New Image has no need for further capital, is too small, has too few shareholders, and its shares traded too infrequently for it to remain as a listed vehicle," he says.