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Ladder Award: University Finance Students who predicted Chinese investment

John Gallagher nominates for a Ladder Award, the Canterbury University Team that won the Chartered Financial Analyst Society’s University Investment Research Challenge. The team members were students Tom Quirk, Bruce Duyvesteyn, Marco Nikolic and Sam Clement who were mentored by Rick Boebel and Rhiannon Evans.

This group of students anticipated Pyne Gould & Guinness Wrightson’s (PGGW) likely need for a new cornerstone shareholder, which “they believed would come from China or India.” (The Press Businessday section, October 17, 2009, page C19).

Their report analysed how PGGW would not be able to raise $237 million that it needed from its existing shareholders. “Nikolic was happy to find out yesterday that their predictions were correct after PGG Wrightson announced Chinese agricultural company Agria Corporation was taking a 13 per cent stake.” See also Agria to buy into PGG Wrightson

John Gallagher is very pleased to see New Zealand expertise being developed that can recognize and assess how New Zealand business is doing in the world economy, especially the Chinese one.

John Gallagher sees their prize-winning work as providing a valuable wake-up call. He says “their kind of acumen is sorely needed in a country that since 1973 has continually accumulated debt to keep its economy afloat, with little sense of where this would lead (NZ’s international relationships – getting to the best options).

“Now that various innovative Asian economies are coming through the global recession very cashed-up where other nations are going steeply into debt, the trends may become more apparent, along the lines that this team has begun to document.”

To help turn this kind of situation around, John Gallagher very much looks forward to being able to award Ladders to people or projects that will help New Zealanders to connect constructively and effectively with people in and from Asia at all levels. He considers that new skills are needed, through from everyday life to business and diplomatic levels. He believes that “any effective programs to develop these nationwide must include widespread ICT use, especially including through sister city networks.” (Innovative Sister City Networking for Global Solutions).

“Had that been worked on over the last few decades, the likes of PGG Wrightson would have been in surplus because of being able to develop and pitch products to the high-end of the likes of Chinese and Indian markets.”

As Canterbury University’s Vice Chancellor Rod Carr has so well said, not engaging with the wider world, especially including Asia, is not an option (Smart universities and localities for smarter intercultural collaborations).

John Gallagher is wondering how comfortable readers feel about New Zealand’s abilities to cope with the international economic situation, and if they see any directions or strategies for doing this better. How do they feel about the insights and strategies of our political leaders across the political spectrum, or any of our economic analysts?

Send in your Ladders or Shovels

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1 Comment

  1. Hazel Ashton says:

    See also Bernard Hickey’s comments on Radio Live Business 18 October, 2009. He points out PGG Wrightson needed the money – $200 million – and China is the only place with spare cash. He says this” marriage” between New Zealand’s PGG Wrightson and China’s Agria as it is referred to, could be a template for the future. However, Bernard Hickey points out mergers and joint ventures across cultural divides haven’t worked thus far for New Zealand. He couldn’t think of one which hadn’t ended in tears. (RadioLive Business 18 October 2009)

    China is becoming a reality in our region and our lives – I think it’s about time to think about building win-win relationships with China and to help to build relationships in the Asia/Pacfic region (including the United States). It can be done, but any important relationship takes some time and effort. To marry in haste (or worse still, desperation) and have to repent at leisure, is not the best way to go about building relationships.