What world does Adams live in? - $A5b Aussie fund manager

The government is kicking the Chorus [NZX: CNU] can down the holiday road, Investors Mutual senior portfolio manager Simon Conn says.

His firm, which manages $A5 billion of funds, has more than four million Chorus shares and has holdings in SkyCity, Mighty River Power, Fletcher Building and Z Energy.

He has raised his concerns over Chorus’ regulation shocks with Prime Minister John Key, who has passed his letter to Communications Minister Amy Adams.

Mr Conn says Ms Adams’ office has replied, saying that she’s aware of his concerns but she will not be able to reply fully until Parliament resumes in late January.

“I don’t know what world these people are living in but late January is a month away – I could have sold every New Zealand stock I’ve got by then and invested the money in a favourable regulatory jurisdiction, like Australia.”

Will he sell out and cut his losses before January?

“I don’t know; it’s a daily proposition,” he says.

Asked if he has sold out of other New Zealand companies, he says: “I’d rather not divulge that.”

The Commerce Commission's final copper broadband pricing decision, released on November 5, has sparked a series of posturing comments between Chorus and the government, provoked a well-organised PR campaign by the telecommunications industry and prompted Chorus to withdraw its dividend guidance and file a High Court appeal of the commission's decision.

Mr Conn says he wants the government to act, to implement a regulated asset base model over the telecommunications sector which delivers a reasonable return, and guarantee investors they will earn a reasonable rate of return on the UFB spend.

“It’s costing New Zealand credibility at a time when you could be making a lot of hay.”

As reported earlier today, Chorus has re-engaged with internet service providers over plans for cheaper, faster fibre, while earlier in the week two analysts weighed the impact and timing of Chorus having to undertake possible capital raising.

Over the last 12 months, Chorus [NZX: CNU] has been one of the worst performers on the benchmark NZX50, with its share price dropping about 50%.

For more read today's National Business Review print edition.

dwilliams@nbr.co.nz