MELBOURNE AUSTRALIA (Daily Reckoning): Our intranational jetsetting knows no bounds. Today Melbourne, later today Adelaide. The wonders of air travel never cease to amaze. What will they think of next? Fortunately we will be travelling with Virgin Blue rather than Air Force 2, so even though we may be late at least we’ve got a good chance of getting there safely… and without a detour to Afghanistan.
So despite the fear of disappointing, we can offer only a brief summary of the current monumental events occurring in the market.
Why does Oncard International (ASX: ONC) keep going up? The answer of course is that there are more buyers than sellers. Another barnstorming rise yesterday saw the company’s share price increase by a whopping 37% on the back of even higher volume than Friday.
But as to why there were more buyers than sellers? Because more people think it will rise than fall. Again, too obvious. Perhaps the company has more good news to tell us this week. Or maybe the influence of the recommendation in the Eureka Report last week is still filtering through the market.
Whatever it is, at least it does represent something slightly different from the usual uranium/copper/zinc/nickel/gold small cap prospects that we are used to.
Something that isn’t so unusual is to see a steel company reporting a good performance. A set of results that actually managed to exceed expectations. Again perhaps not surprising given the trend of the last few years.
But as an aside, what does seem to be different is something that caught your correspondent’s ear over the weekend. The increasing activity of corporations to be seen as environmentally friendly. Now, we’ll admit that this isn’t entirely new, we’ve seen the likes of BP spouting their “Beyond Petroleum” slogan for a few years.
However, there does seem an eagerness for companies and their representatives to be even more proactive when it comes to green credentials. Take for example the electricity industry; yesterday morning we heard their lobby group (the name of which we missed) badgering the government to introduce a carbon trading system. This was vital they claimed.
But why should business become so keen for the government to implement a plan that will likely cost millions and millions of dollars, especially to those companies that are responsible for much of the pollutions – namely electricity generating companies?
The obvious answer is that they are keen to get in there first and lobby the government for all manner of tax breaks, arguing that it is imperative that their businesses are subsidized in order to reduce the impact of potential job losses in the industry.
Naturally the government will fall over themselves to do so, especially as public opinion – rightly or wrongly – has moved further to the ‘Green.’ It also presents a perfect opportunity for governments both federally and state to maintain taxation levels, arguing that they will be spending money on energy and water. The reality of course is that they will just continue to spend it on ‘consultation groups’ and providing subsidies and grants to a range of hair brained schemes.
To see the shift that has taken place in the corporate world over the last couple of years, one only has to take a look at the results presentations by BlueScope Steel (ASX: BSL). In yesterday’s presentation it took them until the eighth slide before they even got stuck into the company’s financial results.
Before the financials, investors were treated to BlueScope’s “Injury Rate”, a “communities are our homes” slide, “Water Conservation – clear focus on further reducing fresh water consumption,” and another slide on water. They even go to the trouble of producing pie charts explaining their water usage between salt water, fresh water and waste water.
You will be pleased to know that 96% of their usage was salt water and that only 2% usage was precious fresh water.
Roll back the clock two years to 2005 and it takes them no longer than the fourth slide of the presentation to get straight into those ‘Green’ issues such as “share buybacks” and “franked dividends.” In fact a search of the entire presentation fails to produce any focus on water issues.
Only time will tell whether this is a serious effort by private enterprise to pay their own way on ‘green’ issues, or whether it is a sop for government subsidies and the green ‘vote.’
for The Daily Reckoning Australia