HARD NEWS 3/3/00 - Dot-com Riot Report
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HARD NEWS 3/3/00 - Dot-com Riot Report
By Russell Brown
GOOD DAY MEDIAPHILES ... one of the perks of my day job is overseas travel. It's always under pressure of time but it's usually both a useful separation from local matters, and a brain-feast that takes weeks to unload.
The 24 hours I snatched in and around Beijing last week hardly makes me Marco Polo, but it was long enough to form a some vivid initial impressions. Beijing isn't like anywhere I've been before.
I can see that it could be a challenging place to live. The same two or three species of trees are planted in their millions, but they're all deciduous, so at this time of year they bear neither leaves nor birds. It's about two degrees some days, dun-coloured, dull, cloudy and awash in cold, dry dust.
Living there now, even in one of the shiny new condos springing up all over the place, would require a measure of stoicism. But for a people who didn't have private property 20 years ago, they're making a pretty enthusiastic transition to enterprise - even if, as in the case of our young guide, that comes accompanied with a cultural cringe of gigantic proportions.
There is, nonetheless, a rumble under this society. Every market - from bottled water to mobile phones - is a growth market. Everything's about to bust loose. That sense is as pronounced, albeit differently expressed, in Hong Kong, where they still haven't tired of their millennium slogans.
That fact was brought home to me when I saw a dot-com riot. We happened upon the concourse of the Hong Kong Shanghai Bank, which was thronged with thousands of citizens clutching their cheques and their share application forms.
More citizens were arriving by the minute and panicky policemen were rushing around stringing up tape to try and keep the queues in order. It didn't work. The excitement got too much, the tapes burst and the crowd surged forward. It was chaos. It was amazing.
The IPO they were all excited about - a Web portal called tom.com - actually doesn't seem to have that much going for it, bar the involvement of a well-known local investor who usually gets things right.
And yet, depending on which sources you were inclined to believe, the offer was between 1500 and 2600 times oversubscribed. In seeking investment of about $NZ180 million, tom.com may have wound up with cheques for nearly half a trillion. It'll have to give all but a fraction back, of course, but the daily interest alone will make a few people pretty wealthy.
You could either look at this as a massive vote of confidence in popular capitalism and tech stocks, or as a harbinger of impending doom - the last time people rushed the share market like this was in the 1920s, and we all know what happened then.
Whatever the reading, it sure ain't happening here. The Nasdaq shot up last week, taking every stock exchange on the Pacific Rim with it - except ours. Here, the promised investment of $1billion in telecommunications infrastructure by Telstra Saturn was taken as bad news for Telecom - and hence yet another reason to bail out of the NZSE. How depressing.
But not nearly as depressing as the response of the NZSE chairman, Eion Edgar to Michael Cullen's observation that the local exchange is a dog. He blamed the government reviews of competition in telecoms and electricity for his exchange's hopeless record.
Apart from the fact that one of those was only actually announced last week, is this man suggesting that a competitive market is a bad thing?
Edgar also blamed the new government for not offering up more privatisations. What, like Contact Energy, where offshore investors made all the money because the little guys didn't get their access codes in time for the listing - and the NZSE just let trading go ahead without them? It's hard to think of a bigger disincentive to popular capitalism than shabby privatisations like that.
Of course, most of our business titans - the likes of Alan Gibbs - have fought for years to prevent a fair deal for small investors. Remember Fay and Richwhite doing deal after deal - often on the back of cushy government contracts - that enriched them and left their shareholders eating dirt? Or the Lion Nathan board queueing up for a premium price in the Kirin sellout - a price that ordinary Lion shareholders would never get to see?
The sad fact is that the New Zealand share market has sucked for a long time. It is in worse health now than it was when Rob Muldoon was Prime Minister - when there were nearly twice as many companies listed. If there has been any economic miracle since, it has been a disappearing act.
Could it be that the business leaders who are so keen to instruct the public in how to think and behave have crapped in their own nests a few too many times? Crikey, it must be time to blame the government again, huh?
Anyway, further on the travelling tip, one of the other challenges of being in a foreign city is finding a decent coffee. Hotels everywhere serve basically the same see-through filter swill. You can find yourself dreaming of Auckland - especially when you pay $13 for a lacklustre long black at Beijing airport.
Which is why I was surprised, to say the least, to come back and find Orin Smith, the president of Starbucks visiting and dismissing New Zealand coffee as "green and a little bitter". Our cafes "could do a lot better" he said.
Oh, right. Look, I've sampled Starbucks coffee in America and in Auckland. In the first case it was mediocre - and in the second it was frankly horrible. But then, I drink coffee. Just coffee. If your preference is for something more like a McDonald's milkshake then Starbucks probably is your place.
Actually most of the people I see through the windows of Starbucks are disorientated American tourists, drawn there for the security of the brand, and the reliable crapness of the coffee. Much like McDonald's.
So what else is up? Is Peter Ellis is a child abuser? I still have no real idea, but I can say he was the most impressive interview subject I've seen on TV for a while.
How much worse can WINZ's terrible student loan foul-up get? Much worse - they haven't even got onto student allowances yet, and they made a complete bollocks of that last year.
Will TV3's lawsuit against TVNZ over the Hawkesby affair cause even further embarrassment to the SOE's management? No doubt about it - and you tend to think that if Rick Ellis is still there in two weeks' time then he's being kept on to face the music.
Will Jim Anderton's new Ministry of Economic Development work? Only if he can strip the bureaucracy to the bone - and even then he'll need an early result. The question he may find hardest to answer is: why does a hi-tech manufacturer want to be in Taranaki once the government aid stops flowing?
Have Tainui screwed up royally by booting Graham Lowe and Malcolm Boyle off the Warriors board? Totally. The stupid part of the whole deal - that Lowe and Boyle got 30% of the original franchise for virtually nothing - remains - it's just that now their skills aren't available to the business.
Is New Zealand cricket in crisis? No, we're alright - we just happen to be playing the best team in the history of the game.
And will Team New Zealand's five-zip win in the America's Cup boost the national mood? Undoubtedly. I'm not really much on this red-socks contrivance - especially when the patriotic socks come from Korea - and I've turned down numerous opportunities to waste a day on the water trying to watch the yachts, but I utterly appreciate the magnitude and manner of the team's win. They won like a good All Black team; overwhelmingly, with impeccable composure and focus.
There were off-water victories too. TVNZ's coverage of the whole event was startling good - and I'm personally pleased to see a pay-off for the brilliant people at Animation Research in Dunedin, the people behind the graphics. If you happen to catch this, Ian Taylor, rock on. You're a legend.
The regatta's legacy to Auckland is that, after decades of being shut off from the sea, it has a vibrant and popular waterfront. It may be populated by prize wankers like Leo Molloy, but it wouldn't truly be Auckland without a little wankerage, would it?
Anyway, issue two of Loose magazine is out, in luxurious black and white, and you ought to buy it, and - hey! - the 95bFM Private Function is upon us again. Last chance to see Shihad for the year, the Kogsters, Salmonella, the lot. I'm way up for it - G'bye!