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Of Bulls & Bears

Friday 25th August 2000

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Predators lick lips at sickly Telecom

The word from well-connected share market types is Telecom Corporation's share price is likely to continue sliding in the short-term - and that a takeover bid by some well-heeled overseas telco can be expected if the shares get down to $6. Telecom's share price went below $7 this week from nearly $10 in April and appears still to be heading south.

Wallis wonders at Walmart wealth

Stan Wallis, a leading light in Australian management circles and the new chairman of AMP, is not a big fan of corporate governance as others in this part of the world see it. In a speech recently, he noted that the "Australian model" of good listed company management had an independent chairman, some independent directors and eight to 10 meetings a year. Needless to say, this model is also popular in New Zealand. However, Mr Wallis is quick to point out that in the US, companies are making plenty of money for their shareholders while meeting none of these criteria. He notes that Walmart, for example, has 3600 stores - many more than any listed retailer in this part of the world. Walmart's board meets just four times a year and the company is extremely wealthy, while there are numerous local examples of poorly performing retailers with a comparative handful of shops and a board that meets every month. Many US companies also concentrate power in the hands of a combined president/chief executive while such an approach is rejected in Australasia. "While there are surveys and surveys and there are assertions to the contrary, there is little evidence to indicate that 'best practice' corporate governance delivers 'best practice' outcomes for shareholders over the long run," he said.

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


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