MIDDAY UPDATE: Trade-weighted index at 16-month high

Dec. 7 (BusinessDesk) - The New Zealand dollar climbed to a 16-month high on a trade-weighted basis after investors piled into currency after Reserve Bank governor Graeme Wheeler yesterday all-but ruled out a rate cut as he zeroes in on potential inflation emerging in the country’s housing market.

The trade-weighted index recently traded at 74.35 and earlier rose as high as 74.45, the highest level since August last year, from 74.03 yesterday. The kiwi rallied to 83.13 US cents from 82.87 cents yesterday.

RBNZ’s Wheeler kept the official cash rate at 2.5 percent and told reporters it will stay there until the end of 2013 as he keeps tabs on an Auckland property market that’s heating up and building inflation pressures in the Canterbury rebuild. The bank hiked its projections for the TWI and sees it holding above 73 until December 2013, and falling to 71.40 in early 2015.

“The RBNZ gave the market the green light to keep buying the kiwi and that’s what they’ve done,” said Mike Jones, currency strategist at Bank of New Zealand in Wellington. “The currency looks very strong and completely shook off a near 1 cent collapse in the euro.”

Turners & Growers forecasts FY net loss up to $19M on orchard writedowns

Turners & Growers, the fruit marketer controlled by Germany’s BayWa Aktiengesellschaft, changed its guidance and is now forecasting a full-year loss, reflecting a writedown of its orchards.

“Early indications are that there will be write-downs, particularly of orchard properties and biological assets,” the company said in a statement. “As a result the after-tax loss is forecasted to be between $16 million and $19 million.”

“Despite continued challenging domestic market conditions trading has been steady albeit it is marginally behind last year,” it said.
In August, the company posted a 2.2 percent increase in first-half profit and it was on track to improve its full-year operating result. The shares haven’t traded today and were last at $1.56.

NZX adviser cuts $10k settlement over dodgy Trade Me deal, keeps name secret

An unnamed adviser at a registered NZX participant firm will pay a $10,000 settlement to the market watchdog after getting found out on a backroom deal to get Trade Me shares when the online auction site was floated last year.

The adviser used a client to get their hands on 1,500 Trade Me shares in the initial public offering, when the stock was sold at $2.70 apiece. The partial float’s structure was unusual because the bookbuild was run before the offer document was registered.

Under NZX rules, employees in a trading participant need sign-off from their boss to buy or sell any listed securities, and aren’t allowed to take part in a public offer.

The NZ Markets Disciplinary Tribunal agreed to settle with the adviser, provided they paid $10,000 into the discipline fund, and cover costs incurred by the regulator.

The adviser transferred cash to a client who then bought 1,500 shares in the float worth $4,050, which was then handed back to the adviser in an off-market transfer. Shares of Trade Me fell 0.9 percent to $4.21 today.

Wynyard gets toehold in US market with Northrop Grumman tie-up

Wynyard Group, the security and risk management software firm owned by Jade Software, has got a toehold in the US, partnering with Virginia-based Northrop Grumman Corp.

The deal gives Wynyard access to a US$2 billion market, which accounts for about half the global market in security and risk management software, and will give the New Zealand firm a foot in the door to securing the US Federal government as a customer. New York Stock Exchange-listed Northrop Grumman is the world’s fourth-biggest defense contractor with annual revenues of US$26.4 billion.

Chief executive Craig Richardson told BusinessDesk the alliance gives the New Zealand firm the credibility that comes with partnering alongside a major player, and will mean Wynyard will have to ramp its investment in North America, including finding office space in Washington DC, before reaping revenue in 2014.

“In the medium-term plan, 2013 is about building awareness in the market,” Richardson said. “We’re really targeting the 2014 year for the more material earnings.”

(BusinessDesk)

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