Talk Money with Tony Field – July 8, 2015

Craig Norgate
Craig Norgate

It is a testament to the achievements of businessman Craig Norgate that tributes have come from such a wide range of people overnight, from farmers, to the Prime Minister to the rugby community.

But one tweet leapt out at me. Meg @mfsloan tweeted: "Craig Norgate was very nice to me when I worked in a restaurant years ago. Complimented the coffee, which was one of the first I ever made."

You can tell a lot about a person from how they treat a stranger who they meet for just a few minutes.

Norgate was the first chief executive of Fonterra, taking on the role in 2001 at the age of 36. But he had already played a central role in the creation of the co-operative.

As the head of Kiwi Dairy Company he encouraged the merger with Waikato's Dairy Group.

After two years as the chief executive of Fonterra he led PGG Wrightson for six years, and helped oversee the merger of the New Zealand Institute of Chartered Accountants with their Australian colleagues.

He was also a passionate Taranaki rugby fan and served on the board of the New Zealand Rugby Football Union.

His passion for New Zealand business and his strategic thinking have been mentioned by many today.

Norgate is survived by his wife Jane and three children.

Here is my talk with Paul Henry.

The drama in Greece has tended to overshadow the falling Chinese stock market in recent days.

But increasingly people are turning their attention to China. It is hard to avoid the issue with Chinese stocks down almost 30 percent.

The Shanghai Composite index fell 1.29 percent yesterday. It has lost more than 25 percent over the last 30 days.

The Shenzhen Composite, which is often likened to Wall Street's tech-heavy Nasdaq, fell 5.34 percent yesterday and is down over 30 percent in 30 days.

More than 20 percent of the stocks on the two exchanges are now in a trading halt, and 760 companies out of 2808 have suspended trading.

China's market differs in some significant ways to the New Zealand, US and European markets.

Around 90 percent of investors are individuals, rather than institutions like retirement funds. The market has been more speculative, with millions of people signing up for brokerage accounts in the last few months. They were attracted by the thought of quick riches in a market that had risen 100 percent in 12 months.

Foreign investors have relatively little exposure to the Chinese stock market. That is why many observers say the greater concern for the world economy is China's property market, which has been built on growing amounts of debt.

China is one of the reasons that oil prices are falling.

Yesterday US crude slumped 7.7 percent, while today it was almost unchanged, down 20 US cents at $52.33

Traders are concerned about China and Greece. But they are also worried about a supply glut.

Lots more oil could come onto the market if trade sanctions are lifted against Iran. It is attempting to have sanctions lifted in exchange for a new nuclear deal.

There has also been an increase in US oil rigs.

European Brent crude rose 43 cents to US$57 a barrel.

The New Zealand dollar has slipped 0.6 percent to 66.47 US cents this morning.

The Kiwi was trading at 42.99 pence and 60.36 Euro cents at 8.30am.

It's gained narrowly against the Australian dollar, at 89.28.

It is looking like another disappointing quarter for Samsung.

Samsung's guidance suggests profits will be down about 4 percent for the latest quarter due to weaker than expected sales of the Galaxy S6.

It was meant to turnaround Samsung's smartphone sales, after a fall of over 20 percent last year.

The design of the S6 has won praise, but that doesn't appear to have resulted in the leap in sales that analysts had been hoping for.

A challenge for Samsung has been how to get customers to buy its phones rather than cheaper Android rivals.

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