iPredict to launch stocks forecasting Fonterra payouts
Monday 22 August 2011
iPredict to launch
stocks forecasting Fonterra payouts
New Zealand's online predictions market, iPredict, will this week launch stocks to provide New Zealand dairy farmers and others with the first-ever five-year forecasts of Fonterra's likely milk solids payout.
Draft stocks are currently available at https://www.ipredict.co.nz/forum/read.php?4,13546,13546#msg-13546 to enable traders to review and comment on their fine-print prior to the formal launch. Dairy farmers and other dairy industry experts are also encouraged to comment and trade.
"Fonterra is New Zealand's most important company, responsible for around a quarter of our exports and around 7% of GDP," iPredict CEO Matt Burgess said today.
"Until now, the only source of rigorous data about the company's future payout to farmers has been the company itself, and then usually with only a two-year horizon.
"With iPredict's new stocks, dairy farmers, the wider industry, economists, banks, the government and everyone with an interest in New Zealand's medium-term economic prospects, will be able to obtain free snapshot information on how the company is likely to perform, in terms of payout, for the next five years."
Mr Burgess said the stocks would be based on Fonterra's final payout, per kilogram of milk solids, to a 100 percent share-backed farmer (before retentions), for the five financial years from and including 2010/11.
"Currently, Fonterra is forecasting a payout in the range of $8.00 to $8.10 for 2010/11 and $7.15 to $7.25 for 2011/12. The iPredict stocks will provide farmers and everyone else with an independent assessment of the forecast payout."
Mr Burgess said the iPredict forecasts for the three further out-years would be more indicative but would give a general indication of the likely performance of the company.
"iPredict produces consensus views on the likelihood of future events, based on the theory of the 'wisdom of crowds'. This holds that where people pool their perspectives and knowledge about a future event, their opinion is likely to be accurate," he said.
iPredict's binary contracts of political and economic events had an accuracy rate of 88%, he said.
Predictions markets like iPredict are mainstream throughout the world, with the most prominent being www.Intrade.com in the United States. iPredict operates in New Zealand with authorisation of the New Zealand Financial Markets Authority. The company is owned by Victoria University of Wellington.