Talk Money with Tony Field – September 30, 2015


The discovery of evidence of water on Mars has given NASA fresh encouragement to send astronauts to the red planet.

But how much will it cost?

The amounts are large, but perhaps not as large as you might think.

NASA has estimated that it would cost around US$100 billion (NZ$158 billion). To put that figure in perspective NASA's annual budget is about US$18 billion (NZ$28 billion).

The budget for the Mars mission would be much less than the US$400 billion (NZ$623 billion) that has been spent developing the F-35 stealth fighter. The F-35 is still not operational and the costs are expected to rise by tens of billions of dollars more.

NASA is aiming for a crewed mission to Mars between 2030 and 2040. Before that it will test its technology during a crewed mission into deep space. The deep space missions will use the Orion spacecraft.

The plan for Orion missions is to initially send a robotic mission into space to capture an asteroid and send it into a lunar orbit. Then a crew will head into deep space to investigate the asteroid. That crewed mission is called EM-2 and will cost an estimated US$6 billion (NZ$10.5 billion).

But NASA has suffered from budget cuts through its history and each year's finance round is a struggle.

Several Presidential candidates say they are supporters of NASA. They include Jeb Bush and Marco Rubio who are both from Florida, where NASA launches its missions. Hillary Clinton is another candidate who has expressed support. She says she dreamed of being an astronaut as a girl.

As well as NASA's mission to Mars there is the privately funded Mars One mission. It hopes to send people to Mars for as little as US$6 billion (NZ$10 billion). The astronauts would not return home. The founders of Mars One hope that subsequent crews could be sent for around US$4 billion per mission.

Here is my talk with Paul Henry about NASA's mission to Mars.

It was a busy evening for many of the country's brokers. They were flat out ringing clients to see if they wanted to buy shares in Z Energy.

Infratil is selling its 20 percent stake in Z through what is known as a bookbuild. The eighty million shares are being offered for between $6 and $6.20. That is a 6.5 percent – 9.5 percent discount to yesterday's closing price of $6.63.

At the same time the New Zealand Superannuation Fund is reducing its stake by 9.7 percent (38.9 million shares). It will retain over 10 percent of its stake in Z.

Z has applied to the Commerce Commission for permission to buy Chevron New Zealand's service stations. Chevron operates the Caltex stations.

The Z Energy sale is happening at a time of growing uncertainty on the markets.

The concern about China's slowing economy and weak commodity prices are two factors. Then there is concern that the valuations for many companies are stretched. The Federal Reserve's recent decision to postpone a potential US interest rate hike did nothing for investor sentiment either.

The plans for Carter Holt Harvey to list on the New Zealand share market have been put on hold.

The company is owned by New Zealand billionaire Graeme Hart's Rank Group. It says its 50 strong chain of Carter stores are doing well, but the uncertainty in world markets has led the company to review the merits of a listing.

Many market watchers will not be surprised by the decision.

The enthusiasm for new listings has dimmed this year in New Zealand, with investors very wary of companies that are coming to the market now.

Any potential listing faces a lot of scrutiny over pricing and the owner's motivation for selling.

Wall Street turned into struggle street this morning, despite a surprisingly strong consumer confidence report.

The Dow Jones industrial average finished 0.3 percent higher at 16,049 points.

European markets had earlier finished down again. The losses were modest, but came after a big selloff of more than 2 percent yesterday.

The German DAX fell 0.35 percent. The London FTSE finished 0.83 percent lower and the CAC 40 was down by 0.3 percent.

Mining company Glencore rose 16 percent, a day after it lost 29 percent on the back of an analyst's report saying it will struggle if commodity prices do not rise soon.

The S&P500 rose 0.12 percent and the Nasdaq slipped 0.59 percent.

Australia's top 200 finished down 3.82 percent. Commodity stocks led the selloff, with the Australian market losing 60 billion dollars in value.

The Shanghai Composite Index finished 2 percent lower.

The New Zealand dollar has made gains overnight.

It is 0.27 percent higher against the US, trading at 63.45 percent.

The Kiwi is up by the same percentage against the Australian dollar, at 90.30.

The NZ dollar is 41.86 pence, 76.04 Yen and 56.48 Euro.

3 News