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Speaker 1: So I'd like to welcome into the studio lim Dan Andrew.

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Speaker 1: There we are. He's going to held Business Editor at large.

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Speaker 1: And so the big news yesterday was that Auckland Council

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Speaker 1: sold at staken in the airport for about one point

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Speaker 1: three million dollars. They were quite happy with that because

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Speaker 1: that was twenty cents over an estimate. But there we go.

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Speaker 1: Now the money is going to be used for the

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Speaker 1: Auckland Future Fund. So let's talk Liam about this money

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Speaker 1: and we'll talk about how it's now going to be used.

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Speaker 1: Because the councilor's got this fund to inure itself against

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Speaker 1: future shocks et cetera. It has to do something with

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Speaker 1: the money. What's going to happen to the money?

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Speaker 2: Yeah, So from an investment point of view, it makes

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Speaker 2: sense when you why would you have all your money

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Speaker 2: in one stock effectively not all your money, but you

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Speaker 2: know a big chunk of that money in one stock.

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Speaker 2: You don't do that. You have a fund with the

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Speaker 2: whole range of stocks, and you probably you don't, you know,

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Speaker 2: stick with the nz X. You're probably going to head

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Speaker 2: offshore and go to the most lucrave markets and try

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Speaker 2: and get a better, more stable return because you're you're

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Speaker 2: you know, you're vulnerable with one stock, so it makes sense,

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Speaker 2: but it kind of felt to me like the end

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Speaker 2: of a little bit of a sorry saga. I've been

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Speaker 2: covering the Council's efforts to get out of, or not

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Speaker 2: out of sell these airport shares since about two thousand

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Speaker 2: and two. I think I could find the Herald talking

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Speaker 2: about it since nineteen ninety nine. So there's been various

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Speaker 2: times where there's been big interests from overseas players ninety nine,

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Speaker 2: two thousand and seven where the Council could have sold

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Speaker 2: what was a strategic stake, like almost a controlling stake

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Speaker 2: above twenty percent for a premium, and then they could

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Speaker 2: have gone and used the money somewhere to generate more return.

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Speaker 1: But if you're saying they could have made more if

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Speaker 1: they sold earlier.

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Speaker 2: Yeah, I think what held the whole thing up, obviously

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Speaker 2: in its democratic process, is there was a debate for

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Speaker 2: a long time which has been lost by the state

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Speaker 2: ownership people, really about whether we should strategically have a

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Speaker 2: controlling stake in our own airport, whether we need to

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Speaker 2: as a council or a government own these assets. And

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Speaker 2: you know, look the main be some arguments, but clearly

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Speaker 2: it's been lost. And so what's what's happened is that

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Speaker 2: we've ended up selling in bits and pieces, selling down,

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Speaker 2: not taking up the capital. The capital raising the sheer

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Speaker 2: issue during COVID which moved them below twenty percent. You

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Speaker 2: lose a premium below twenty percent. Basically, if you want

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Speaker 2: to sell more than twenty percent, you can get a

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Speaker 2: very good price if there's a big international buyer looking

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Speaker 2: to do a takeover. But you know they've done a right,

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Speaker 2: They've sold on market. They've done right with this transaction.

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Speaker 2: But if you look back over twenty five years, maybe

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Speaker 2: there could have been a bit more financially savvy.

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Speaker 1: And there's also been argibagi about the Future Fund amongst

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Speaker 1: the councilors themselves. This is Waved Brown's big idea, you know,

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Speaker 1: just to try and free up capital because he's seen

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Speaker 1: he's had to do all the stuff after the storms,

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Speaker 1: he's had to do all every now and then you

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Speaker 1: get a shock, and when you get a shock, you

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Speaker 1: have to pay for it and then you head up

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Speaker 1: the rate payers and he doesn't want to do that anymore.

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Speaker 1: So now we're going to have debate about what to

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Speaker 1: do with the one point three billion, how much of

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Speaker 1: it to keep liquid, how much of it to stick away?

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Speaker 1: Another ethical to be going to get a straight into

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Speaker 1: tobacco stocks because they're making good money, or you said

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Speaker 1: as soon as you said, they'll go for an overseas market.

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Speaker 1: But you know, so it is on the council Richard Hills,

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Speaker 1: how much it invested in New.

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Speaker 2: Zealand company, How much political obligation do they have to

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Speaker 2: do all that? But really, if it becomes like a

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Speaker 2: you know, we've got a good model and the n

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Speaker 2: Z super Fund, which is is trying to be sort

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Speaker 2: of ethical ish. You know, I think they're still in

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Speaker 2: oil stocks, but they've got out of you know, they're

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Speaker 2: not in guns and all that, all that sort of stuff.

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Speaker 2: You know, so ethical ish and really, you know, at

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Speaker 2: this point you're going, well, this fund is meant to

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Speaker 2: maximize the return for rate payers, and so I guess

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Speaker 2: they've got to look at setting something up that can

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Speaker 2: do as well as that and of course return more

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Speaker 2: than the airport returns over the next few years.

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Speaker 1: We need to minimize the dead rats that need to

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Speaker 1: be swallowed. You go, but here's and here's the thing

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Speaker 1: that I talked about last hour. From my point of

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Speaker 1: view was that all the bunny went into to the

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Speaker 1: council's coffers came out of stocks elsewhere in the market,

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Speaker 1: so overall the nz X dropped. It actually had its

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Speaker 1: worst day, and it just struck me that that shows

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Speaker 1: you just how few real hero stocks we have, and

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Speaker 1: that the brokers all jumped through the for the newest thing.

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Speaker 1: And while this doesn't affect each of the companies, you know,

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Speaker 1: it does affect their ability to capitalize and do all

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Speaker 1: sorts of thot.

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Speaker 2: Airport's a useful thing if it's in a portfolio because

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Speaker 2: it's not going anywhere. It'll go up and down with it.

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Speaker 2: But you know, it's considered an infrastructure stable investment, not

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Speaker 2: a huge returner. But it does reflect the fact that

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Speaker 2: the money's all been heading to Wall Street. I mean

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Speaker 2: those tech stocks, you know, the thing propping up our

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Speaker 2: KIV saber funds and it's I'm reading stuff. It does

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Speaker 2: worry a few commentators that, you know, by pouring all

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Speaker 2: that money into Wall Street, it just grows and grows

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Speaker 2: and grows. It's pretty highly valued already, So in a

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Speaker 2: funny sort of way, it's a bit of a dilemma

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Speaker 2: for them really whether they go for all those highly

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Speaker 2: valued stocks that have returned so much over the last year.

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Speaker 1: Yeah, well like Nvidio. You know that that's a hero stock, absolutely,

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Speaker 1: but also some people are also going, well, it might

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Speaker 1: not be as much of a hero as you think,

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Speaker 1: and so if that's the case, then you've got to collapse,

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Speaker 1: so you know. But at the same time, what I'm

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Speaker 1: saying is in New Zealand, it would be great if

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Speaker 1: we had a few more hero stocks.

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Speaker 2: I think that is I think that is a big

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Speaker 2: issue with our economy, the lack of a really large

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Speaker 2: financial sector. We don't have the banks, we don't have

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Speaker 2: you know, we have a fledgling tech sector but not

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Speaker 2: really listed, you know, so we don't have a great

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Speaker 2: representation of the economy on our share market. We haven't

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Speaker 2: for a while. And it's just got so much easier

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Speaker 2: for that. All the young people coming into stocks and shares,

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Speaker 2: which is great on shares's and whatnot. They can just

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Speaker 2: go around the world and.

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Speaker 1: So you know, you know where the money is. The

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Speaker 1: money is in our houses, that.

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Speaker 2: Is right, And that's a whole other conversation.

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Speaker 1: Good stuff.

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Speaker 2: Thank you so much, Liam for more from Heather Duplessy

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Speaker 2: Allen Drive. Listen live to news talks. It'd be from

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