About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Friday, October 31st, 8:44AM
rss
Latest Headlines

Markets react rationally to terrorist attacks

New Zealand fund managers closed down their international managed funds yesterday and it is unclear when they will start allowing people to redeem their investments.

Thursday, September 13th 2001, 2:19AM

by Philip Macalister

NEW POLL

How will the attack on the US affect your financial security?

VOTE HERE

Most international funds, whether they were invested in shares or bonds, were closed because of the terrorist attacks in the United States.

As a result of the attacks the US markets have been closed making it impossible for managers to price their investments.

"Managed fund investors should not be unnecessarily concerned by any suspension as fund managers will be closely monitoring progress in financial markets," Investment Savings and Insurance Association chief executive Vance Arkinstall says.

"It can be expected that any suspension will be lifted as soon as reasonable and realistic valuations are possible."

However, managers have indicated that if there are signs of panic from investors they can, depending on their trust deeds, continue to suspend redemptions indefinitely.

Guardian Trust Funds Management managing director Anthony Quirk says managers will be assessing the situation as it unfolds.

The US sharemarket isn't opening tomorrow (Thursday) and it is unclear when it will reopen.

"Unless you think this is the end of the world then you're better to hold," he says.

The closest parallel to the latest crisis is the Kuwaiti invasion a decade ago.

Back then investors over-sold, Quirk says.

Likewise Alliance Capital general manager James Thyne says that this terrorist act is likely be such a catalyst for a more concerted effort to improve economic growth.

This is potentially good news for the US economy that has been hovering on the edge of recession.

"It could be said that the markets have reacted rationally so far– but it could also be said that they have over-reacted in more general terms. It is this over-reaction that some investment managers may perceive as an opportunity," Thyne says.

There is a view that markets have been rationale, the stocks that should have fallen such as airlines and insurance companies, have done just that and commodities like oil and gold and bonds have risen.

Quirk says much of the bad news has been priced into the market.

European markets took a hit over night, with Germany's DAX closing down 8.7%, France's CAC down 7% and the FTSE fell 5.7%

The NZSE 40 ended the day down 92 points (or 4.2%) at 1873.

In what may seem like a perverse twist the catastrophe has provided buying opportunities.

Quirk says although volumes were light on the New Zealand market yesterday some stocks were trading at "pretty cheap prices".

"It's not Armageddon from an economic point of view," he says. "It's very unusual circumstances."

Although international funds have been closed, cash, mortgage, New Zealand fixed interest and some New Zealand equity funds remained open.

More stories: Market Reaction to bombing


A fund manager's view on the bombings
US recovery likely to be L-shaped

You can read Philip's blog here: http://www.goodreturns.co.nz/blog/

« Demystifying Hedge FundsSovereign takes regulation bull by the horns »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Weekly Wrap

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AMP Home Loans 7.24 ▲5.79 ▼6.19 6.65
AMP Home Loans $200k+ 7.14 ▲5.69 ▼6.09 6.55
AMP Home Loans LVR <80% - - ▼5.75 6.19
ANZ 6.74 6.15 6.39 6.49
ANZ Special - 5.69 5.75 6.09
ASB Bank 6.75 6.09 6.40 6.65
ASB Bank Special - 5.70 5.75 6.19
BankDirect 6.75 6.09 6.99 6.65
BankDirect Special - 5.70 5.75 6.19
BNZ - Classic - - 5.75 5.85
BNZ - GlobalPlus 6.74 5.89 6.39 6.59
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.15 - - -
BNZ - Rapid Repay 6.74 - - -
BNZ - Std, FlyBuys 6.74 5.89 6.39 6.59
BNZ - TotalMoney 6.74 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.45 6.05 6.20 -
Credit Union North 6.45 - - -
Credit Union South 5.75 - - -
eMortgage 6.04 6.15 6.69 7.19
Finance Direct 6.10 6.45 6.69 7.10
First Credit Union 6.45 - - -
Lender Flt 1yr 2yr 3yr
General Finance 5.95 6.25 6.50 7.10
HBS Bank 6.65 5.85 5.99 6.19
HBS Special - - - 5.89
Heartland 6.70 7.00 7.25 7.85
Heretaunga Building Society 6.70 6.00 6.50 -
Housing NZ Corp 6.74 5.99 6.39 6.59
HSBC Premier 6.84 ▼5.69 ▼5.75 ▼5.99
HSBC Premier LVR > 80% - - - -
HSBC Special - 5.39 - -
ICBC 6.75 5.99 6.39 -
Kiwibank 6.65 5.79 ▼6.19 6.65
Lender Flt 1yr 2yr 3yr
Kiwibank - Capped 5.65 6.50 - -
Kiwibank - Offset 6.55 - - -
Kiwibank LVR > 80% - - ▼5.75 6.19
Liberty - - - -
Napier Building Society 5.80 6.00 6.70 -
Nelson Building Society 6.95 6.15 6.60 -
NZ Home Loans 6.85 6.09 6.40 6.65
Perpetual Trust 7.70 - - -
Resimac 6.59 6.35 6.58 6.77
SBS Bank 6.65 5.85 5.99 6.19
SBS Bank Special - - - 5.89
Lender Flt 1yr 2yr 3yr
Silver Fern 5.95 6.10 6.55 7.05
Sovereign 6.85 6.09 6.40 6.65
Sovereign Special - 5.70 5.75 6.19
The Co-operative Bank 6.70 5.70 ▼5.75 ▼6.09
TSB Bank 6.74 5.95 6.19 6.30
TSB Special - - 5.79 -
Wairarapa Building Society 6.20 5.75 5.95 -
Westpac 6.59 6.09 6.39 6.65
Westpac - Capped rates - 6.74 6.99 -
Westpac - Offset 6.59 - - -
Westpac Special - - 5.75 6.19
Median 6.70 6.00 6.39 6.55

Last updated: 31 October 2014 8:39am

News Quiz

In a study of performance fees by Pathfinder, how many of the 10 equity PIE funds reviewed have to achieve a margin over and above their benchmark before performance fees kick in?

10

9

7

5

2

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by PHP Developer and eyelovedesign.com