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[Weekly Wrap] The good, the bad and the ugly

This past week has been a big one for the finance company sector - yet again - with a mix of good and not so good news.

Friday, May 2nd 2008, 2:24PM

I put the Geneva Finance meeting into the good category. Yes, some people have been strongly critical of the deal, and for some quite valid reasons. Also debenture holders were given little choice in reality. Either swap debt for equity, or put the company into receivership. What a taint the latter option is as it tars the company with the same brush as Bridgecorp, Five Star and some of the other less savoury collapses.

Credit needs to be given to Geneva's management for keeping the company afloat and setting it off in a new direction. The biggest caution is that the journey ahead isn't plain sailing and things could still go wrong. It's useful to read S&P's reaction to the changes.

Also today we report that Bluestone has all but given up on Geneva and is now looking for other opportunities in New Zealand.

The other good news is the launch of the first finance company PIE fund. In fact UDC has rolled out two funds and we understand Marac isn't too far behind. It's good to see that new products are being developed. It's useful to keep an eye on this as I suspect there are some other types of products finance companies will roll out in the future and these will be like something which were widely used in the market many years ago. More on this later!

In the not-so-good news is MFS Pacfic (or OPI as it's now called). OPI has been given a hurry up by its struggling parent Octaviar, to get its moratorium to investors. We found out this week that if the moratorium isn't sorted by mid-May then A$20 million Octaviar has put aside for OPI will be taken back.
It would be nice to know what is really happening here.

Late yesterday we also saw an announcement from Dorchester giving its second profit downgrade this year, plus news that its CEO, Andrew Walker, is moving on.

The first bit of news isn't too much of a surprise as this sector is hurting. The second bit about Walker is. I know some didn't like him much, nor the changes that he was making. However, he seemed a smart and effective operator.

The other big news story was who is likely to end up owning Vestar. As reported this week some have looked, but the likely new owner is a firm with little experience in this sector.

Another fascinating story was news that ING Life may launch a Baby Policy for women, giving cover to expectant mums. There has been a bit of criticism of such a policy, but I can't see anything wrong with it and say if people want to take it out and ING are prepared to pay the claims, then get on with it.

Besides recording the departure of Andrew Walker in the People section we have a change of director at PINs and some new appointments at RaboPlus.

Other news this week includes AMP Capital taking some reasonably big changes in its asset allocation to deal with the volatile markets, and US-based institutional manager AXA Rosenberg is touting a new international equities long/short fund to institutional investors in Australia and New Zealand.

The past week has been a busy one for the home loan market (although lending volumes are way down), due mainly to the wholesaler funder AMS increasing its two and three year rates. This in turn showed many non-bank lenders increasing their rates by 10 basis points.

Movement with the major banks started with ASB early last week increasing its four and five year rates, followed by ANZ, BNZ, National Bank and lastly Westpac announcing its increase early this week.

ANZ National has today increased its floating rates, even though the Reserve Bank left the OCR unchanged.

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 ▼2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 ▼3.15 3.29 ▼3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 5.50 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.55 2.65 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac ▼3.39 3.45 ▼2.99 ▼3.35
SBS Bank 4.54 3.09 3.19 3.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.59 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.99
The Co-operative Bank - Standard 4.40 3.05 3.19 3.49
TSB Bank 5.34 3.35 3.49 3.79
TSB Special 4.54 2.55 2.69 2.99
Wairarapa Building Society 4.99 3.65 3.69 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.12 3.19 3.17

Last updated: 4 August 2020 11:33am

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