OCR hike unlikely to filter into higher deposit rates
The quarter-point hike in the official cash rate to 2.75% is unlikely to lift up term deposit rates, which are already attractive due to the ongoing competition for retail investors' cash.
AMP Capital Investors head of fixed interest Grant Hassell says deposit rates are already "seriously attractive" with the banks seeking domestic funds in an aggressive environment. Deposits rates are "about 200 basis points above whoelesale rates" and it will take a bit longer for them to rise.
Hassell does predict wholesale interest rates will increase over the coming week as offshore investors take on the Reserve Bank's more optimistic outlook on New Zealand's economy.
Dorchester Pacific to accept oversubscription in capital raising
Dorchester Pacific will accept up to $1 million in oversubscriptions to its capital raising plan, which needs to attract at least $8 million for its reconstruction plan to go ahead. Its two major shareholders, Bakery Business and Hugh Green have agreed to underwrite at least $7 million of the raising.
Geneva Finance to make September repayments this month
Geneva Finance will repay $5 million of banking facilities and investor's principal this month, ahead of schedule. The $2.5 million owed to investors and the $2.5 million owed to the BOS International is being made as part of a positive cash position, and will take its total repayments to 74% of debenture holders' outstanding principal, including annual interest of 11%.
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