News Round Up: January 9
Best investment bank named; Long term investment thinking needed; Elevation does the opposite and lowers fees: Cigna well placed
Monday, January 9th 2012, 5:00AM
Craigs Investment Partners and Deutsche Bank have been named Best Investment Bank - New Zealand by FinanceAsia Magazine.
“The strategic alliance formed between Craigs and Deutsche Bank (in 2010) is paying dividends for its partners, and also benefitting New Zealand’s issuers with its local expertise and global reach.”
Deutsche took a 49.9% stake in Craigs in mid 2010. Since then they have offered a full range of investment banking services to New Zealand clients. The firms have worked across the major transactions in the New Zealand market across both equity and debt capital markets and have completed a number of important advisory mandates for New Zealand corporates.
The firms worked on the largest initial public offerings - TradeMe and Summerset, as well as Contact Energy’s follow-on offering and the largest block-trade in the market for Ryman. In debt markets where the firms hold the number one position, they joint lead managed Contact Energy, IAG and Air New Zealand’s offerings as well as Genesis Power’s 100% equity-credit capital bonds. The Craigs Investment Partners network distributed more equities and debt than any other Investment Bank in New Zealand.
Long term investment thinking needed
Short-termism has driven markets at the expense of long term investment thinking during a markedly volatile 2011. However, this has created what HSBC Global Asset Management believes to be a potentially strong set of investment opportunities for 2012 for those with a longer-term perspective.
Many investors have flocked to ‘safe havens’ last year, forcing government bond yields to the lowest levels for a generation, which puts some in a position where returns are negative when inflation is taken into account. Combined with the negative fundamentals such as high debt levels, government bonds of developed markets do not represent good value on a medium term basis.
HSBC New Zealand head of wealth Glen Tonks says officials have been applying a ‘sticking plaster’ approach to addressing fundamental problems.
“With this context, at the forefront of investors’ minds is concern around European policymakers being able to deliver a comprehensive long term solution to deal with the Eurozone crisis,” Tonks says. “With strong fundamentals and high growth potential, Asia could provide an attractive investment option in the current lower valuation environment.”
Elevation does the opposite: Lowers fees
Elevation Capital has released a new set of documents for its Global Value Fund of Funds.
These documents (including a Memorandum of Amendments to the Regsitered Prospectus) have been filed and updated as at 23 December 2011 to reflect the decision by the manager to lower its management fee from 0.95% to 0.55% from January 1, 2012.
Documents are available at www.elevationcapital.co.nz.
Cigna well placed: AM Best
AM Best has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of CIGNA Life Insurance.
The outlook for both ratings is stable.
The affirmation of the ratings reflects CLINZ’s strong risk-adjusted capitalisation, continued profitability and market leadership in the credit insurance segment. The ratings also consider the company’s progress in building up new business lines and its initiatives to strengthen its direct distribution.
Investment earnings are expected to remain stable.
Cigna has increased premium revenue and earnings contributions from other business lines to reduce its reliance on credit insurance. The company also has launched a number of initiatives to strengthen its direct distribution channel. These could help Cigna to enhance control over distribution and raise its profile in the New Zealand market.
Partially offsetting these positive rating factors include ongoing competitive pressures, the company’s relatively high lapse rate and the potentially higher claims ratios of the new business lines.
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