Forum Archive Index - December 2001

[donkeyboy <donkeyb1@excite.com>]

I dont disagree with the facts - I dont think you have thought thru your
comments sufficiently re the purpose of hedging, an alternate hedging
policy, and whether the company is accountable or not.

let me pose this question (I expect an answer and rememeber to look forward
cos Harry Hindsight always gets it right)

you run a business - 80% of your revenues are sourced from offshore, 100% of
your costs are onshore. The cross rate is almost impossible to predict
correctly - esp in the short term (ie less than 3 years.
You are not expert in currency, and will be roundly critised it you take an
active position in the FX market and get it wrong. How do you manage the
risk? 

SAN's answer consistantly has been for the four years I have followed it was
the hedging policy I outlined. This policy is implemented regardless of
expectations of currency. The objective in taking the forward contracts is
not to make a stack of cash - it is to manage risk and smooth cashflows.

my veiw is that SAN have always been accountable for their policy, they have
publicly stated it every year at every meeting for at least four years, - it
is only people who believe that the only hedging policy is an active one who
are making noise (note that Terry Hall jumped into the fray on Sunday)- to
my knowlegde the actual investors who have their skin on the line (AMP, GT,
BNZ, Goodfellow, myself) arent upset, as they also see the effects of when
an active policy goes wrong (NCH $300m, FAP $90m in the last year).

If you had read the reasearch, the annual reports and the balance sheet then
you would have known that if the NZ currency went tits up then the company
was always going to make a loss. You would have known this four or five
years ago and if you bought the company you bought this policy. The loss
this year was not a surprise to me or other profesional investors for that
reason.


I dont understand your point about fighting history - I purchased a wack of
stock at $2.60 in mid '98. The share performance in my veiw has been pretty
good, add in the dividends and I am happy

I think if you disregard the currency issue, the company hasnt put a foot
wrong in terms of quota and asset management, in developing most of the NZ
farmed mussell industry (particularly before the moritorum on farms was
brought in)and in fish farm research. 



cheerio 





______________________________________________________________________________
Send a friend your Buddy Card and stay in contact always with Excite Messenger
http://messenger.excite.com



----------------------------------------------------------------------------
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/chat/forum/