The night belonged to Xero and Vend at the NZ Hi-Tech Gala Award dinner in Auckland last night with each collecting two awards and Xero winning the coveted Hi-Tech Company of the Year award. The dinner was attended by over 700 guests at SKYCITY.

Xero took out top honours, winning the PwC Company of the Year category as well as the HSBC and NZMEA over $5million export category. The judges in the Company of the Year category were full of praise for Xero.

“The hallmarks of a great company are focused leadership, rational planning, and superb results in the market, Xero exhibits all of these”, stated one judge. Another international judge remarked “Xero is executing the Web 2.0 playbook perfectly, blending brand building, product development, capital raising and value creation, and global expansion. Xero is the new benchmark for product-based tech companies in NZ”.

Meanwhile, fellow cloud software company, Vend, took out both the HSBC and NZMEA under $5million export category and the State Government of Victoria Services category. Judges were also impressed with Vend’s performance. “Vend’s objective of ‘moving every bricks and mortar retailer onto the cloud’ and its execution of a strategy to achieve this goal impressed us. With thousands of retailer customers in more than 100 countries, Vend is well on the way to being a real NZ IT success story and has plenty of growth left in it yet.”

Amongst the winners in other categories were several first time entrants, including Wynyard Group, ikeGPS, Carnival Labs and Trigger Happy.

NZ Hi-Tech Trust Chair Wayne Norrie says this is a great sign for the industry. “It’s exciting and gratifying to see a whole new generation of Kiwi technology companies coming through and achieving at this level,” he says, “they represent a strong and vibrant future for what is an increasingly important industry for the country.”

“Tonight’s finalists are all incredibly innovative, creative and very, very smart and it’s great to see so many new success stories emerging. It’s a key reason why our industry continues to be the fastest growing contributor to New Zealand’s export economy. We should all be very proud of that.

“We’ve also attracted fantastic local and international judges that would be the envy of any awards programme in the world,” Norrie says, “Our twelve strong international judging panel included co-founder of Apple, Steve Wozniak, the director of engineering for Google in New York, Craig Nevill-Manning; Director of Texas Venture Labs, Rob Adams; Head of IDG Ventures in the US, Pat Kenealy and Cisco’s senior vice president, Howard Charney as well as an array of high profile Kiwi ex-pats.”

It is a credit to the high standard of the technology we produce in New Zealand that we can attract such well known and respected international judges each year.”

Vodafone New Zealand’s general counsel David Kreider has won a bid to keep his $541,000 a year job after the phone company’s acquisition of TelstraClear last year would have made him redundant in the subsequent restructure.

They were at odds as to whether the disestablishment of his position as general counsel and the creation of a legal director role were different jobs, after Kreider missed out on getting the new position in February and was “likely to be made redundant as a consequence.” At stake was his salary of $345,000 in cash and average share bonuses worth $196,000.

Employment Relations Authority member Tania Tetitaha decided the new role of legal director wasn’t substantially different, and that Kreider should be confirmed in or appointed to the role without having to go through a selection process, according to a May 14 determination published on the ERA website.

“There is organisational change by not evidence of significant changes in Mr Kreider’s work environment,” the ruling said. “A reasonable employer could not conclude the differences were of a sufficient degree to break the essential continuity of employment.”

Vodafone head of corporate affairs Tom Chignell said the company disagrees with the determination, and is reviewing whether to appeal the determination.

The phone company claimed the new legal director role had a bigger team and needed new skills after the TelstraClear acquisition, including the ability to managing legal issues relating to the government’s ultra-fast broadband initiative.

“The primary disagreement between the parties relates to the value of the work namely the multi-million dollar managed contracts and consequential liability and risks which arise,” the determination said.

While the risk in the combined phone company was greater than what Kreider faced when Vodafone was simply a mobile operator, that didn’t mean the roles were different, it said.

The role hadn’t been filled at the time of the ruling, though Vodafone had picked a “prospective appointee for the role who is currently working elsewhere.”

Kreider also submitted Vodafone breached an agreement to keep the status quo by dropping him from the executive team and employing someone else in the role as UFB director, the ruling said. The alleged breach may be pursued at a substantive hearing if it’s not settled sooner.

New Zealand producers’ input and output prices posted the biggest gains in almost two years in the first quarter, driven by a rebound in electricity prices and higher prices for dairy manufacturers.

Producer input prices, which are a measure of wholesale inflation, rose 0.8 percent in the first quarter from three months earlier, according to Statistics New Zealand. Output prices also rose 0.8 percent. They were the biggest increases since the second quarter of 2011.

Electricity and gas input prices jumped 15.1 percent, snapping two quarters of decline, which the statistician said was mainly due to higher power generation prices in the face of lower lake levels. The output price index for electricity and gas gained 12.5 percent, driven by higher generation prices and spot-market conditions.

Electricity and gas input prices fell 0.4 percent in the year through March, while output prices rose 1.4 percent.

Dairy manufacturing input prices rose 4.5 percent in the first quarter, reflecting higher prices for raw milk, while on an annual basis prices dropped 2.7 percent. Dairy output prices rose 5.7 percent in the latest quarter, after six straight quarterly declines, reflecting higher export prices for milk powder.

Prices of dairy products reached a record high last month, based on the GlobalDairyTrade GDT-TWI Price Index.

The dairy cattle farming outputs index rose 5 percent in the first quarter, reflecting higher farm gate milk prices received by dairy farmers. The index fell 7.7 percent in the year, the seventh straight annual decline.

The sheep, beef cattle and grain farming output index fell 7.8 percent in the quarter and 11.5 percent in the year, the fourth annual decline.

Meat and meat product manufacturing input prices fell 7.8 percent in the quarter on lower prices for sheep, lamb, beef and cattle. In the year, input prices fell 10.4 percent, the biggest drop since 2009.

There were mixed results for price movements in commodities. The price index for export logs rose 5.3 percent in the quarter, driven by offshore demand. The Fertiliser index fell 0.5 percent and the sea freight index fell 5.6 percent, which the government statistician said reflected price competition for containerised cargo.

The price index for commercial rent rose 0.6 percent, led by office buildings. On an annual basis commercial rents rose 3.8 percent, the biggest gain since the March quarter of 2008.

Separately today, government figures showed the capital goods prices fell 0.1 percent in the first quarter to be up 0.8 percent from a year earlier.

(BusinessDesk)

The New Zealand dollar slumped to its lowest this year on expectations an improving US economy may prompt its central bank to end its quantitative easing policy this year.

The kiwi fell to 81.58 US cents from 82.48 cents at 5pm yesterday. The local currency earlier touched 81.37 cents, its lowest level since Nov. 21 when it traded at 81.08 cents. The trade-weighted index dropped to 77.05 from 77.60 yesterday.

The US currency has been buoyed by suggestions the Federal Reserve may end its policy of buying US$85 billion of Treasuries and mortgage-backed securities each month to boost growth. John Williams, president of the Federal Reserve Bank of San Francisco, said in a speech on Thursday the central bank could begin reducing the pace of securities purchases as early as the northern hemisphere summer, calling a halt to the programme sometime late this year.

The New Zealand dollar dropped following the comments, said Imre Speizer, senior markets strategist at Westpac Bank. “Dialling back quantitative easing means a US dollar bounce and a kiwi fall,” he said.

Speizer expects the New Zealand dollar may drop to as low as 78 US cents.

Still, he expects the New Zealand currency may bounce today to 82.20 US cents caused as weaker US data suggests growth in the world’s largest economy is still uncertain.

Weaker reports in the US yesterday showed factory activity slipped in the mid-Atlantic region, while ground breaking for new homes declined. In New Zealand, the government confirmed in its budget that it still expects to return to surplus in the 2015 financial year.

The New Zealand dollar dropped to 83.13 Australian cents, from 83.44 cents at 5pm yesterday. It fell to 83.37 yen from 84.30 yen, and slid to 63.30 euro cents from 64.07 cents. It weakened to 53.39 British pence from 54.16 pence.

(BusinessDesk)

Standard & Poor’s, the global credit rating agency, has put eight local banks on notice over the rising risk of a housing bubble bursting in New Zealand.

Smaller lenders Cooperative Bank, Heartland Bank, TSB Bank, Credit Union Baywide, Credit Union South, First Credit Union, New Zealand Association of Credit Unions and Police and Families Credit Union have all had their outlooks dropped to negative from stable, giving them a one-in-two chance of being downgraded in the next two years if the country’s economy deteriorates, S&P said in a statement.

The outlook for bigger lenders, including ANZ Bank New Zealand, ASB Bank, Bank of New Zealand, Westpac New Zealand, Bank of India (New Zealand), Rabobank New Zealand and Kiwibank, was left unchanged due to expected support from their parents.

The rating agency said persistent current account deficits and a heating property market were threats to the New Zealand economy. New Zealand’s current account deficit is forecast to keep widening to 6.5 percent of gross domestic product by 2017 as trade surplus from exported goods falls in the wake of the drought and the deficit from imported services remains elevated.

“We consider that there is an increasing risk that a sharp correction in property prices could occur if there is a weakening in the country’s macroeconomic factors,” S&P said.

If those threats materialise, “banks’ credit losses could rise materially, given that there was a build-up in housing prices and domestic credit over the period preceding the global financial crisis,” it said. “We consider that such a scenario would have a high impact on the banking sector and the financial strength of the balance sheets of New Zealand banks.”

An $18 billion residential rebuild in Canterbury is seen as the backbone for New Zealand’s economic growth over the coming four years, and the Treasury ramped up its forecast housing inflation, which is seen peaking at a 7.1 percent annual pace this year and the next.

New Zealand’s bubbling property market is seen as a threat to the country’s financial stability, with the International Monetary Fund yesterday saying local housing is about 25 percent over-valued and the Reserve Bank last week threatening to introduce restrictions on low equity loans if they pose a “significant risk” to the system.

S&P said some of the Reserve Bank’s planned initiatives to managing banking sector risks could mitigate the country’s vulnerabilities.

(BusinessDesk)

The latest reports on the US economy pointed to weakness, or at the least slower forward momentum, leading investors to press the brakes on Wall Street’s record run.

The Philadelphia Federal Reserve Bank said its gauge of factory activity in the mid-Atlantic region dropped to minus 5.2 in May, while the Commerce Department said housing starts sank 16.5 percent to an 853,000-unit annual rate in April.

“The US economy is still struggling with lacklustre growth and the recovery is far from self-sustaining, so equity markets are looking for guidance from central banks for their liquidity high,” Chad Morganlander, a Florham Park, New Jersey-based fund manager at Stifel Nicolaus & Co, told Bloomberg News.

A separate report showed the consumer price index dropped 0.4 percent, the biggest slide since December 2008, underpinning expectations the Federal Reserve will maintain its efforts to stoke the pace of growth in the world’s largest economy.

“Inflation data was very good. It doesn’t put any pressure on the Fed. Investors are confident the Fed will continue to stimulate the economy,” Paul Zemsky, head of asset allocation at ING Investment Management in New York, told Reuters.

Earnings provided mixed signals. Shares of Cisco jumped, last up 13 percent, after the company reported profit that surpassed estimates. Investors also applauded Kohl’s results, bolstering the department-store retailer’s stock 4.6 percent.

However, shares of Wal-Mart dropped, last 2.2 percent lower, after the retailer predicted second-quarter earnings that fell short of expectations.

“They’re pressured by the economy, unemployment, the increase in payroll taxes, the delay in tax returns,” Bernard Sosnick, an analyst at Gilford Securities based in New York, told Bloomberg. “All these negatives coalesced in the first quarter.”

The Dow Jones Industrial Average had just touched a record high of 15,302.49 earlier in the session, but ran out of steam. In afternoon trading in New York, the Dow edged 0.03 percent lower, while the Standard & Poor’s 500 Index was unchanged at 1,658.77. The Nasdaq Composite Index rose 0.24 percent.

In Europe, the benchmark Stoxx 600 Index ended the session nearly 0.1 percent lower from the previous close. Still, it has gained 10 percent so far in 2013. The UK’s FTSE 100 and France’s CAC 40 both fell 0.1 percent. Germany’s DAX rose 0.1 percent.

As for the outlook for commodities, it’s bleak, according to a poll by Credit Suisse. Gold will trade at US$1,100 an ounce in a year and below US$1,000 in five years, according to Ric Deverell, head of commodities research at the bank. “Gold is going to get crushed,” Deverell told journalists in London today, Bloomberg Businessweek reported.

(BusinessDesk)

Progress in the Government’s programme while on track to surplus

Telecom’s Gen-i has agreed to sell its Davanti Consulting business in a management buy-out the latest step to trim down IT services unit.

Davanti Principal Consultants’ Justin Hamilton, Matt Farrar and Robert Carter have signed a conditional agreement for Gen-i’s Davanti unit for an undisclosed sum, and is expected to settle on May 31, Telecom said in a statement.

Gen-i faces margin pressures and is switching its focus to big data and cloud-based services. Telecom has already announced 120 jobs were going from its Gen-i Australia unit.

Davanti employs 80 staff, and assets customers speed up change within their organisations.

The divestment comes after Telecom today told investors this year’s earnings will be at the low end of a range between $1.04 billion and $1.06 billion, and faces bigger restructuring costs than anticipated.

Telecom is aiming to cut the number of full-time equivalent workers to between 6,300 and 6,600 by mid-2013, from the 7,530 on its books at Dec. 31.

That will trim its payroll costs be between $100 million and $120 million a year, the company said today. The figures exclude 140 workers gained with the acquisition of Revera.

Telecom’s shares sank 4.2 percent to $2.51 today, and have gained 18 percent this year.

The New Zealand Debt Management Office will cut its borrowing programme by $3 billion over the next two years as the government looks to clamp down on its growing interest bill and build a buffer for future shocks.

The DMO will cut its short-term Treasury bills on issue by $1 billion in the 2013/14 financial year and will reduce bond issuance by $2 billion the following year, the department said in a statement. The office expects net borrowing of $9 billion in the current financial year, a $3 billion reduction next year, and net issuance of $5 billion and $7 billion the following two years.

The government department will focus on extending the duration of the Crown’s debt portfolio, and is mulling launching two longer-dated bonds as art of this year’s programme. Maturities being considered are an April 2027 and a September 2030 inflation-indexed bond.

New Zealand debt has been an attractive option for foreign investors, with higher yields on offer in a global environment of low interest rates. Reserve Bank figures this week showed non-resident holdings of government securities were at 66 percent last month, the highest proportion since November 2008.

The government’s net debt is forecast to rise to $70.3 billion, or 27 percent of GDP, at the end of the 2017 year, from $57.9 billion in 2013. It expects to show a cash surplus of $1.8 billion in the 2016 year, though after capital requirements it will be in a residual cash deficit through the forecast period.

“This year we’re paying interest on our debt of $3 billion,” Finance Minister Bill English said in a briefing in Wellington. “We need to lower our debt to absorb the chance of another shock.”

(BusinessDesk)

Finance Minister Bill English has given the tick of approval to the Reserve Bank’s new set of tools to cool asset bubbles, the most pressing of which is the country’s heated property market.

The minister has signed a memorandum of understanding with central bank governor Graeme Wheeler granting the bank regulator the ability to require lenders to hold more capital on their balance sheets against certain assets, or restrict the level of low-equity home loans, English said in a statement.

Under the agreement, Wheeler will make his final policy decision independent of the government, though the governor is expected to advice the Finance Minister of any macro-prudential policy decision.

“The objective of the bank’s macro-prudential policy is to increase the resilience of the domestic financial system and counter instability in the domestic financial system arising from credit, asset price, or liquidity shocks,” the memorandum said. “Macro-prudential tools do not replace conventional prudential regulation, but may be used from time to time to help manage the risks associated with the credit cycle.”

The Reserve Bank has been under growing pressure to cut interest rates to reduce the appeal of the currency, which has been hindering exporters, while a heating property market has provided a counterbalance by threatening inflationary pressures.

The memorandum said the Reserve Bank will have to consider the impact on monetary policy settings when using the new tools, and “in most instances macro-prudential instruments will reinforce the stance of monetary policy.”

Last week the bank said it would roll out restrictions on high loan-to-value ratio lending if it posed a “significant risk” to the system, having cited rising property values and the growing prevalence of low-equity lending as threats to the country’s financial health.

The Treasury today overhauled its forecast on house price inflation over the next five years, with annual inflation of 7.1 percent in the 2013 and 2014 years, having previously seen housing inflation peak this year at 6.5 percent, before slowing to between negative 1.3 percent and plus 1.6 percent over the following four years.

Real Estate Institute figures this week showed the stratified median housing price index, which smoothes out peaks and troughs, rose an annual 9.8 percent in the year ended April. Auckland’s stratified housing price was up an annual 14 percent and Christchurch’s climbed 13 percent.

Housing Minister Nick Smith today announced the government has reached an accord with the Auckland Council, in the first agreement with local authorities to streamline resource consents and make housing more affordable.

The Reserve Bank’s four new tools are adjustments to banks’ core funding ratio, required capital buffers during excessive credit growth, capital requirements for specific assets, and restrictions on high loan-to-value ratio mortgage loans.

(BusinessDesk)