Sharechat Logo

Shareholders shortchanged

Friday 28th April 2000

Text too small?
Special report by Nick Stride

Billions of dollars of shareholder value are being destroyed in the stockmarket's top companies but Treasurer Michael Cullen says it is a problem for the private sector to address.

An ANZ Bank study shows the companies comprising the NZSE40 index destroyed $1.2 billion of economic value in 1999 alone.

ANZ head of corporate banking Joseph Healy briefed the Treasury on its findings in late March and has called for a working group to study the problem.

The group would examine whether, for instance, public companies should be forced to report to shareholders in economic value-added terms as well as traditional accounting terms.

Dr Cullen said yesterday that ANZ's work was "very interesting" and raised some valid points.

But the problems identified were mainly a matter for the private sector to address. If submissions were made to the government he would be interested to receive them.

ANZ says there is little doubt companies' disastrous track record in wealth creation is hurting this country's economic performance.

Figures released last week show New Zealand has slipped another notch in world competitiveness rankings.

The annual study by the Swiss-based International Institute for Management Development ranked New Zealand 21st out of 47 countries for overall competitiveness. New Zealand's ranking has slipped almost every year since 1995 when it was in ninth place.

Ratings for the "brain drain" - 41st out of 47 - and export growth - 46th - were particularly weak.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Napier Port plans mid-July share offer
NZ dollar firms after RBNZ holds rates; eyes on China-US trade talks
Banks, insurers should expect more intrusive RBNZ - Bascand
McConnell to pay $1.1M: used Hawkins' insolvency as a weapon - judge
Hipkins seeks joined-up thinking across state bureaucracy
Economists now expect August rate cut from RBNZ
RBNZ keeps OCR at 1.5%, signals more easing likely
UPDATE: Fletcher shares gain on $300 mln buyback
IMF favours gradual bank capital hike
Fonterra says full-season milk collection up 1.2%

IRG See IRG research reports