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Stories by Nick Smith

Risk off the menu for Kiwi companies

Whatever anyone says, earthquakes can’t be predicted. Their likelihood can only be expressed as probabilities based on statistical evidence. Just as to speculate successfully on where the economy is heading, you need to know where it’s been. Economists say it’s almost certain the country is in double-dip recession. They are updating their figures continuously due to the Christchurch quake. Fletcher Building has downgraded its profit by $14 million to $24 million, post-quake. Others are bound to follow. Events in Christchurch put the economy deeper into recession and the longer-term risk of inflation could grow, prompting a rise in interest rates. Bank of New Zealand chief economist Tony Alexander has said New Zealand was probably already in recession in January. The quake removed any doubt.
CFOs recognised recession was on the cards before February’s seismic activity. “It is conceivable,” ventured Luke Bunt, Warehouse chief financial officer and CFO summit speaker. Late last year Bunt cited disappointing retail figures and early summer drought conditions as reasons for the prospective double-dip (remember New Zealand underwent five consecutive quarters of decline ending March 2009). The Warehouse same store stales were down almost 4 percent for the two months ending 2 January; total sales were down 2.7 percent compared to the same period last year.

Written by Nick Smith27 March 11 23:00

Sword of Damocles hangs over all senior executives

There is a common misconception, perhaps even held by senior executives themselves, that serious mistakes go unpunished. Certainly the public perception is there’s always another well-remunerated position waiting for executive miscreants.
Sydney Finkelstein, the Steven Roth professor of management at the prestigious Tuck School at Dartmouth College, begs to differ.

Written by Nick Smith04 May 10 22:00