November 25, 2010 | Graham

Topsy turvy days in Queensland

Upfront I should say that I bought shares in QR National, even though it is an oxymoron. It seemed the smart and the right thing to do.

As a liberal I’m all in favour of government concentrating its assets on those things that the market can’t do, and capital running businesses. QR National is not the sort of thing a government should be doing, and the prospectus proves that when you look at all the inefficiencies the business has.

As an investor, I’m all in favour of trying to buy shares cheaply and selling them expensively, and I prefer shares which have substantial cashflows. QRN certainly has the cashflows, and a combination of factors made the shares relatively cheap. And courtesy of poor government management as well as business prospects, those cashflows should increase.

There were a lot of reasons for the shares to be cheap. It was a large float, and the government was a more than willing seller.

There was the comparison with Telstra which trades below its various issue prices.

There was the opposition from the unions, which was fed into many media stories.

There was the attempt by Australian institutions to game the stock and push its price down, because, as a top 50 company, they are all going to have to buy stock in it.

And there was the opposition from the Liberal National Party.

None of these factors should have counted against the stock, but they did to some degree.

Looked at more closely, they don’t stand-up.

The Telstra story is not an exact fit. Telstra was always going to be under competitive pressure and the government was always going to force phone charges lower once it had sold all its shares. QR doesn’t fit that profile.

The noise from the unions should have been discounted, and the Australian Institutions, rather than pushing the price down and being able to buy more cheaply after the listing find themselves having to buy shares more expensively as the price has appreciated close to 10% as of today. Foreign institutional investors who bet against the locals must be laughing, particularly the UK  Children’s Investment Fund and the US Scout Capital.

All of which leaves the Queensland LNP in a difficult position. The government now has the sale proceeds, succeeded when everyone said they couldn’t and the LNP has no answer to the question of how they would fund the state without the sale.

Which should be a lesson to them to stick to their principles, but I’m beginning to wonder what they are.

Certainly the link between belief in free enterprise and the Liberals seems to be very weak in Queensland. Not only did the LNP oppose this sale of one transport related company, but at the Brisbane City Council level Campbell Newman is proposing to buy Queensland Motorways, another transport related company which is the operator of the Logan Motorway, Gateway Motorway and the Port of Brisbane Motorway, and valued at $3B. The current owner? You guessed it, the Queensland Government!

Would I put my own money into this investment? I might, given the right price and situation, but I wouldn’t put the public’s money into it because that is not what it is for. If the public wanst shares in a motorway operator they can pay for it themselves, which is what any proper liberal would say.

Makes you wonder who’s who in the zoo these days, and who your should vote for.

Posted by Graham at 1:41 am | Comments (4) |
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November 13, 2010 | Ronda Jambe

Under the Moruya Moon (12)

There isn’t really anywhere to get away from it all anymore, but Moruya Heads is as close as it comes for me. Open space, quiet (except that we’re on the flight path for a once a day jet) and pleasant country people for company.

Not too much to do except walk, read, bswim in the shriekingly cold ocean, and get quotes on solar power. I argue with spouse that it is still a sensible thing to do, even though NSW has cut the feed-in tarriff by two thirds.

Here I can just toss the compost into a bush. We bring water from town, not feeling comfortable about what goes into the water tanks. There’s no dishwasher, and I don’t miss it. All the curtains, furniture, dishes and even manchester here are re-used and non-precious.  That’s the way I like it. I did get a new dustbuster, 12V and powerful enough to take many spiders to a lingering death.

Not happy to see a big black snack slithering close to the deck. Where is that goanna that should be eating its young? The world beyond this haven also slithers darkly, coming through on the satellite internet and the radio.

Tigers and turtles being slaughtered in huge numbers, despite bans. The rule of law and human rights disregarded in China. Currency wars, deficit implications, and mad-as-a-hatter at a tea party election results in the country we all still have to pay attention to.

Visiting Sydney friends who went back yesterday told me of the heat and traffic they hit. They had to get off the M5 because it was so jammed up. More expressways create more traffic, when will the planners break out of that cycle?

I’m missing a lot in Canberra this summer, of an inspiring sort. There’s so much happening in that set of sprawling but relatively enlightened suburbs that gets overlooked when people talk about capital ‘C’ canberra, the city of national political decision making. Lots of local people are doing many good things for their territory, from organic gardening workshops to energy-saving displays to re-designing old clothes. As for me, I use whatever comes to hand from second hand stores and craft shops to make collages, as useless and relaxing as can be imagined.

Andrew Leigh’s maiden speech (he’s the recently elected rep for the ACT)  talked about the social capital of Canberra. For a while I complained about the Greens not exerting their balance of power in the ACT gov, but maybe now their hard work is starting to show. Of course the ALP will take major credit for anything significant, but all around, in jurisdictions large and small, it seems the Greens are taking on greater prominence. Except in that big, complex country that we all still need to pay attention to. And the UK and France of course, too.

These are the Sunday morning musings from a Canberran  displaced for a while into a calmer spot. The turbulence of the world can be muted for now, like the distant roar of the ocean. Up here on a gently curved ridge, looking out on gum trees in fog, none of those waves can reach me.  But I’ve got a long-handled shovel ready if I see another black snake. I trust they’re not endangered.

Posted by Ronda Jambe at 9:52 pm | Comments (1) |

November 04, 2010 | Graham

City Cycle in climate cycle pothole?

I like the Brisbane City Council idea of placing hire bikes around the city to be used as an alternative to trains, buses, taxis and personal automobiles, but has Campbell Newman for once got his timing wrong?

This photo, taken at the lower end of Edward Street suggests he has. With the Pacific Ocean gripped by a La Nina, Brisbane is forecast to have a wetter than average summer. You can get wet enough here in summer riding a bike when it isn’t raining, so when it does rain, riding is out of the question. Don’t those bike look shiny and new?

City Cycle bicycles wait for the rain to stop.

All dressed-up, and only La Nina wants to dance

Posted by Graham at 4:40 am | Comments (6) |
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November 03, 2010 | Graham

CSIRO to NBN – just watch us innovate

Today CSIRO announced that it had developed new wireless technology that allowed multiple users to download data at 12 Mbps without any reduction in the data transfer rate. (more…)

Posted by Graham at 7:27 am | Comments (3) |