News Round Up December 19

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ISI has a new name; the pros and cons of state asset sales.

Monday, December 19th 2011, 5:18AM 1 Comment

ISI changes name

The Investment Savings & Insurance Association (ISI) has announced it has changed its name to the Financial Services Council (FSC). A formal launch of the new name will take place in March 2012.

SOE sales beat KiwiSaver compulsion on fund manager wish list

Privatising state-owned assets has trumped KiwiSaver compulsion as the top Christmas  wish for New Zealand’s fund managers, according to the latest Russell Investments  Fund Manager Outlook survey. 

“Managers believe that an SOE float will help breathe new life into an equity market that has struggled to attract new listings in recent years,” said Russell Investments head of consulting, Daniel Mussett.
Making KiwiSaver compulsory, or at least increasing contributions, came a close second followed by wishes to see a Government austerity programme, a focus on debt reduction, lower corporate tax rates and new free trade agreements. 

Sentiment toward each of the asset classes remains consistent with recent quarters. However, bearishness on global bonds is now near its highest of any time during the survey’s five-year history. Concerns around rising yields as managers factor in lower prospective bond returns are driving this sentiment. Sentiment to equities was more bullish consistent with previous quarters.

Mint warns investors’ over SOE sales
State-owned asset sales will boost the NZX and have the potential to get Kiwis back into share investing, according to Mint Asset Management chief Rebecca Thomas. However, she also warned investors’ that the shares were not without risk.

“This is an opportunity for the Government to create a positive investment cycle whereby the New Zealand public hopefully have a positive experience from investing in shares, resulting in more money going into productive, non-property related investments,” she said.

However, she also warned investors’ need to do their homework. “Listed state owned assets come with the same risks associated with any other exchange listed company and it will be vitally important for that message to be communicated to investors prior to investors purchasing the stocks.”

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