The interest rate cycle in New Zealand and the United States is expected to remain mild despite recent rises, AMP Henderson head of investment strategy Paul Dyer says.
He describes the recent interest rate increases as a matter of central banks taking back the insurance they bought last year when they cut cash rates following the terrorist attacks in the US.
Dyer expects the New Zealand cash rate to peak about between 6.5% and 7% (currently it is 5%, and there is a chance the Reserve Bank will increase it at the OCR review on Wednesday).
Dyer says is certain rates will rise this year, however he doubts they will be in get as high as they have in the past decade.
Rising cash rates mean bond yields will keep moving up, the sharemarket will rise further on the back of better earnings expectations, and the dollar will strengthen
Tower bonds oversubscribed
The remaining $100 million closes on April 19 and is also expected to be oversubscribed.
New look FMG
New Zealand’s leading rural financial services provider, FMG (previously Farmers’ Mutual Group) has launched a new brand and service offering. The new brand reflects the changes FMG has made to ensure its services match the changing needs of rural communities.
Chief executive Gordon Cairns says opportunities are opening up in the rural market as 'big city markets' have become the focus for many of FMG's competitors.
He says the rural community is no longer just farmers, but includes people on lifestyle blocks and employees in increasingly more sophisticated agricultural processing plants, such as IT workers.
FMG has increased the number of client business managers it has restructured its head office and reconfigured its branch structure to ensure that our people are better able to provide our clients with appropriate and timely service. FMG have also introduced new services in response to our clients’ changing needs and have successfully expanded into Australia.
CSFB sold again
The management team at investment bank Credit Suisse Boston are buying the business.
The buyout, which is being led by managing director Bill Trotter, plans to operate in an alliance with Credit Suisse.
Earlier this year Credit Suisse sold its retail broking arm to its managers who are now trading as First New Zealand Securities.
Speculation is mounting that ABN Amro will quit its investment banking operations in New Zealand.
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