News Round Up
Online bond trading, Prebble predicts CGT on UK funds, Commission bans Waltus, AJ changes fund rules.
Monday, September 4th 2000, 10:46PM
Investors will be able to trade bonds directly over the Internet soon thanks to a new initiative from the Bank of New Zealand.BNZ is about to launch Bond Direct as the latest addition to its online securities trading service.
Bond Direct is an important innovation for the New Zealand financial markets providing immediate and easy access to New Zealand bond investors.
The service will trade Government Stock, state-owned enterprises, local authority, bank and well-rated corporate debt.
There will be a nominal transaction fee and a small buy-sell spread, the bank says.
Prebble predicts CGT on UK funds
Act leader Richard Prebble is predicting in his latest newsletter that the Government will introduce a capital gains tax on UK-based managed funds promoted in New Zealand.
He says this will be achieved by changes to the FIF rules.
Prebble says whacking a tax on these funds is an attractive revenue raising exercise for the Government as New Zealanders have "billions of dollars" invested in them and "few of the investors are Labour voters".
A spokesman for Finance Minister Michael Cullen, as reported earlier, has said a change to the FIF rules is unlikely.
Commission bans Waltus
The Securities Commission has provoked a strong reaction from Waltus Property Finance (WPF) after it banned the company from offering debt securities.
The commission has cancelled the company's prospectus and prohibited it from distributing the prospectus dated May 12, 2000.
It alleges there are differences between the wording of the trust deed and the investment statement and prospectus.
The commission says the investment statement and prospectus are "likely to mislead" investors because of its description of the term "Person or group of related persons".
It says the issue is of concern because 80% of WPF's leading has been made to people associated with the majority of the directors of WPR or Waltus Investments.
Waltus chairman John Hodge says the commission's decision is "a spurious interpretation of one word."
The company is appealing the decision in the High Court.
AJ changes fund rules
Armstrong Jones is seeking unitholder approval to change the investment mandate for its Property Securities Fund.
Currently the fund, which invests in listed property securities in New Zealand and Australia, can invest up to 20% of its money in Australia.
The manager is seeking approval to remove this restriction and to invest the money in Australia and New Zealand as the "investment team deem(s) fit."
It says a trigger for this move is the takeover of St Lukes by Australian company Westfield Trust.
Because of this "a substantial portion of investable retail property has been removed from the market," managing director Paul Fyfe says in a letter to unitholders.
He says the mandate change is logical because of the long-term economic relationship which exists between the two countries.
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