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Bill Bennett


Tag: NZ Herald

The New Zealand Herald is the largest daily newspaper in the country. Its main circulation area is Auckland and the North part of the North Island.

Many of the links here are to stories I wrote for the paper.

NZ Herald’s steampunk view of Xero

Read the headline on Hamish Fletcher‘s High-flyer Xero crashes to worst spot and you might think the accounting software as a service company is in trouble.

Technically speaking Fletcher is right. Xero shares lost 50 percent of their value during 2014. They fell 65 percent from their highest point. In that sense it does make the company the worst performer in the NZX.

But investors overpriced Xero shares at their peak and, presumably, at the start of 2014.

The Herald might have added that anyone buying Xero shares at the start of 2013 would have made more than 100 percent on their investment when 2015 began. Or getting on for 600 percent from the start of 2012.

Traditional rules

If Xero was a traditional industrial stock, say a company from the steampunk era or the more dieselpunk Air New Zealand, it would be bad news indeed.

Xero is a technology company. It’s still young. It is a growth stock. Xero’s price moves around a lot. Some speculators took a wild punt on the company and came off badly. That’s what the numbers tell us.

The Herald tries hard to make its stock market reporting relevant to non-specialist readers. I applaud the idea. The practice is something else.

Creating tables, which look like sporting leagues, makes financial news accessible. But January 1, 2014 and January 1, 2015 are arbitrary dates. Pick two other dates one year apart and you would get a quite different picture.

And that’s the inherent problem in popular reporting of financial markets. The simple-to-understand snapshots thrown out by this kind of table, or for that matter the quick daily run through gainers and decliners on electronic news bulletins don’t convey useful information for anyone.

Professional investors don’t sit at their trading desks waiting for the whiz through prices on Radio NZ’s Midday Report. The rest of us don’t hear the report tell us Air New Zealand is down 10 cents then decide it’s time to call the broker.


Fletcher puts the Xero facts in context. He notes: “chief executive Rod Drury’s focus on customer growth means this is unlikely to faze him.”

This isn’t hidden. These words are in the third paragraph, above the fold as we used to say in the old time newspaper world.

Yet I’m willing to bet if the headline on the story ever gets dragged out and used in public, say by Xero’s rivals in the US, that extra, clarifying third par information won’t be part of the picture.

There are stories about Xero’s share price movements that need writing. Thanks to collapsing advertising revenue, the Herald no longer has the resources to allow a journalist like Hamish Fletcher spend a couple of days getting to the bottom of the stock’s rise and fall. That’s not just a problem for the Herald, it’s a problem for Xero, for investors and for the New Zealand public. My plan for 2015 is to do something about that. Watch this space.

Weekly update: China, Alibaba and ASB

Seamen using Lyttleton Library wi-fiPhoto taken last month in Lyttleton on a Sunday afternoon. We saw seamen walk into town from the harbour, in the past they might have headed straight for the bars, but for this Asian crew their first destination was the public library where they could use the free wi-fi.

My week from Monday April 14 to Sunday April 20 was quiet after a busy start to the month. The Easter break is partly to blame, Good Friday was a public holiday and New Zealand’s tech sector slowed down gently into the long weekend. 

Highlights this week were two stories published in The New Zealand Herald’s China Business pullout: Bringing paua to the people and Asia firmly on the rural map. I’m pleased with the way the first story turned out. It is about NZ companies selling fresh produce though the Alibaba online store. The thing I love about these NZ Herald features is they get me talking to people who I might not interview in the normal course of my work covering the tech sector.

On Thursday I took delivery of the Motorola Moto X phone. I’m looking at it over the next couple of days and it will feature in next week’s update.

Tuesday saw Unfinished business in NZ 700MHz band. The Commerce Commission has yet to give the green light to Telecom NZ using the fourth block of 700 MHz spectrum it picked up in an auction earlier this year. That story could get interesting.

Early in the week I filed stories on fibre in Whangarei and Rolleston. NorthPower says it will finish building its Whangarei fibre network at the end of next month – that’s bang on the schedule it negotiated with Crown Fibre Holdings.  Meanwhile Enable Networks reports relatively strong take up of fibre in the small Canterbury  town of Rolleston.Meanwhile, Chorus said it is running ahead of schedule on its fibre roll-out. The company says it may soon show some interesting take-up numbers of its own.

Next week promises to be short but busy with a public holiday on both Monday and Friday. I’m scheduled for a TV appearance on Tuesday  and already have five media appointments to squeeze into three days — there’s also a GST return due.

Fairfax’s bloated, overweight Stuff

In the last hour I checked the size of the front page of six news web sites New Zealand readers might use. All were tested with using http://analyze.websiteoptimization.com. Here are the results. Stuff is way out in front:

So you can read the Radio New Zealand News page 200 times and still download less data than a single read of Stuff.

Fairfax’s site is a long way ahead of everything else. The nearest, The Sydney Morning Herald, is another Fairfax property. The problem seems to be company wide.

While these numbers may not be important if you’ve got broadband and an unlimited download plan, they make a huge difference when you are on the end of a slow link or paying through the nose for each megabyte of data. That means mobile or any kind of stingy data plan.

None of the sites attempted to show one of those awful TV style advertisements during this test. I hate to think what they might add to the totals.

Update: The National Business Review weighs in at 398 Kb.

Tech skills shortage to return with a vengeance

Things might not look too hot at the moment, but pretty soon tech skills are going to be in demand again and the employers who showed a dark side during the recession will struggle to fill vacancies.

Despite the recession, New Zealand still has a severe shortage of building industry skills and there are pockets of the IT business where vacancies have remained since the global economic meltdown began.

Australia is already showing signs a severe shortage of tech skills could hamper companies and government departments as early as next year. In Demand for ICT professionals on the rise, bottom is in Stan Beer at iTNews reports; “The bottom in ICT employment has been reached and demand for skilled jobs is once again on the rise, according to the latest market survey from a major technology recruiter. The news adds to a growing list of evidence of a return to health of the ICT jobs scene.”

A week earlier ITNews covered a report from Australia’s largest recruiter Peoplebank saying the demand for contractors was rising. A similar story appeared in CIO magazine in June with Seek Employment noting the overall job market was stabilising with IT consultants in high demand.

Australia’s ITNews reprinted a story from Britain’s Computing newspaper on July 7 saying the antipodean nation is busily recruiting IT specialist in the UK to meet a shortage.

On a related note, The Australian reported on a skills shortage in research organisations in Upgrade ignores skills shortage. And the New Zealand Herald reports there are many shortages in engineering.

The New Zealand edition of CIO magazine carried a report which suggests the majority of employers in the IT sector still face a skills shortage despite the recession. Despite downturn, opportunities remain for APAC IT candidates suggests one in four tech employers expect to increase their headcount this year. The story singles out specific skills in business analysis, datawarehousing, ERP (Oracle/SAP), web development and infrastructure (architecture) as being of particular interest.”

Some shortsightedness is in evidence in IT training budgets slashed at ITNews which suggests employers have slashed skills spending and can expect to see a serious skills vacuum by 2112.

What does this mean?

First, it’s a safe bet the skills shortage will return to Australia in the next year or so and to New Zealand soon after – the two countries are effectively a single market for knowledge workers. If anything it could be worse than before for a couple of reasons. Many skilled workers will have drifted off into other occupations or even early retirement. At the same time employers have cut back on training during the recession. While there are increased numbers of people taking tertiary courses in technology and similar subjects, many won’t enter the workforce in time for the recovery and they’ll have knowledge, but little experience, which means only a handful will hit the ground running.

Employers who behaved cut back staff, skimped on training or held on to skilled workers and pushed them too hard during the recession will all suffer once the skills shortage kicks in again. Knowledge workers will be able to drive better bargains – and recent experience will teach people to look beyond the pay packet.

Financial literacy for knowledge workers

Until the end of the 20th Century, financial literacy was optional for knowledge workers. Sure there were people who understood how money worked, but they were usually either senior managers or company accountants.

You need to understand economics – even if it’s only to know when to bail out of a failing company, look after your personal investments or navigate a financial crisis.

More to the point, knowledge industry skills are now central to the commercial world. So knowledge workers need financial literacy.

Read, read lots

You have to do the hard stuff yourself. At the least read local business news stories every day. Start out by reading about companies that are either partners or direct competitors to your employer or your own business.

Make a point of relating what you read about business up and downs, share price movements and similar news to what you personally know about a company. Soon you’ll realise you probably know at least as much as the so-called professionals – at least in your niche.

New Zealand’s strongest business publication is The National Business Review. A lot of the paper’s best material doesn’t appear online. I recommend its features. While both the New Zealand Herald and the Fairfax newspapers including the Dominion-Post have busy-looking business news sections, they compare poorly with the Australian business press. They are under-resourced.

Which means it can pay to look overseas to understand local events. I subscribe to The Economist (www.economist.com) and Businessweek (http://www.businessweek.com). Again, both have good websites – though only paying subscribers to the print editions see the best stuff. And, like the Financial Review and BRW, both offer plenty of background.

Pure online financial news services (such as Bloomberg www.bloomberg.com) are for insiders – you’ll get the news, but fewer explanations. On the other hand, their news is more up to date.

There isn’t enough time to read everything published in all these publications. Be selective. Pick out the juicy bits and move on. Apart from your own niche interests, make a point of reading the big picture and currency stories to get an idea of where the Australian or New Zealand economy is heading.