Familiar beginnings, now for the surprises
A NEW year starts and already the news is flowing. There are yet more FMA investigations getting under way, more corporate hacking (page 4) and more arguments about how we solve New Zealand’s affordable homes challenge (opposite). So far so very familiar. What we’d all like to know is what surprises 2013 will hold, but we can’t because then they wouldn’t be surprises.
Uncertainty remains high over the international financial system and its stability, but the early signs are of stabilisation. The US has made progress towards averting a fiscal cliff crisis while Europe may finally be moving forward as well.
China definitely is, with increased demand for hard commodities becoming evident in Australia, including increased forecasts for aluminium demand. That will be welcome news in Invercargill and Bluff, where uncertainty has been rising over the future of the Tiwai Point smelter. Picking up from last year, you can expect more NZX listings. My pick is that we will see the Government make real progress at last on its ‘‘mixed ownership model’’ privatisation of state assets. But even without that there’s the Mad Butcher and others to look forward to.
Having been at the Moa listing launch last year, it’s hard to describe the kind of excitement a successful public offering can generate, even a very small one like that.
Don’t, however, expect too many scenes like the one I witnessed in Hong Kong in the 1990s when Tom.com listed. There, under the iconic HSBC building, a neat queue of wouldbe investors turned into a scrum that bowled tables and forced security to intervene. We might have to wait a few years before we see that again.
Ideally we would never see it again, because by now we should all know it is total madness. But history shows we are destined to forever repeat out errors. The most frustrating thing about the last three or four years has been the lack of direction in the economy. I’m not speaking of direction for the government or even from business, but just the lack of any trend you can really latch on to.
Drift is the word. We will continue to drift this year, I think, but investment, company results and the employment market should improve as it goes on. There are already signs consumer spending may lift as it becomes harder and harder to postpone essential spending.
Key to our wellbeing is the price of milk. We remain too dependent on agricultural commodities. Our economy has diversified slower than our markets over the last few decades. No-one has found a way to build high value companies, jobs and to keep them here.