Well it had to happen - the collapse of a finance company. The prize goes to National Finance 2000.
What can we learn from the collapse?
Predicting who is going to fall over in this busy sector is difficult to do. But, in my view, there were signs that company was a candidate for the prize.
With a lack of decent and widespread research and credit rating information in New Zealand you have to look to other far-less scientific ways of figuring out which companies are dodgy, or at risk.
One sign I've always thought as useful is that when you see a company doing a level of advertising which appears to be disproportionate with its size and resources worry.
To me it is a sign they are desperate and need money badly. National Finance 2000 is a classic example. Here is one of the smallest players in the market on prime time television urging potential investors to give them money.
Another important factor is to look at where they lend. Finance companies playing in the car finance market and to some extent the consumer finance market face the biggest pressures now. There was a useful graph in the KPMG financial institutions report that clearly illustrated the biggest default rates were in companies in this sector.
We know other companies, notably Western Bay Finance and Provincial, have been having their difficulties too.
But remember not all companies in these markets are having troubles. There are also some solid players in this space too.
The other thought to take on board is what will this collapse mean for the overall sector?
My view has been that if a small, low profile company collapses it won't have too much impact on the market, but people will start to look a little more closely at their investments and who they are with.
A larger company collapse could cause taint the whole sector. New deposits would dry up and companies without adequate financial strength may have trouble paying out interest payments and maturities.
What could prove me wrong is if other, small to mid-sized company that has used television advertising with high profile individuals, falls over.
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