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Investors may expect more from NZ in wake of quake

Investors may want more of a risk premium on their investments in New Zealand in the short term because of this week’s earthquakes.

Friday, November 18th 2016, 5:59AM

by Susan Edmunds

Philip Borkin

ANZ senior economist Philip Borkin said the quakes were likely to have a manageable effect on the New Zealand economy overall.

But he said there would be some changes for the investing landscape.

He said investors would expect more of a risk premium on the New Zealand dollar, which could drive the currency lower.

“I don’t think the currency will fall significantly but it changes the risk appetite towards investing in New Zealand."

Paul Richardson of Mint Asset Management said the same might apply to overseas owners of New Zealand bonds, who might also seek a premium. He said while the New Zealand market for listed bonds was small and had the potential to be moved more easily than some, institutional owners tended to sit on them rather than sell them at the wrong time.

The earthquakes would be just another layer of concern for those making investing decisions, he said. There was already a watchful eye being kept on international concerns, as United States interest rates in particular looked set to rise quickly.

Brian Gaynor of Milford Asset Management said there had been suggestions that the quake might affect tourism operators – but benefit roading companies – but the effect was unlikely to be big enough to affect any investment decisions.

“It would be significant if we got one every week for the next two months.”

Christian Hawkesby, of Harbour, also expected the impact on the market to be minimal. Although it was a bigger quake than the Christchurch shakes of 2010 and 2011, fewer people were affected, and the impact was less widespread, he said.

But Carl Richards, a behavioural specialist who is now working with Consilium, said some investors might need a reminder to refocus on their goals.

“The resulting general feeling of uncertainty might lead us to do other things that might not be so good for our financial lives,” he said.  “Take a deep breath, and let that feeling you have that you must ‘do something’ pass and shift that energy where it could be put to use in the community.”

Tags: bonds investment risk

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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 ▼3.85 ▼3.95 -
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 ▼2.93 ▼3.07 ▼3.24
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 ▼3.05 3.19 ▼3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - ▼2.55 2.69 ▼2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 ▼2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 ▼3.29
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 3.05 3.13 3.12

Last updated: 11 August 2020 8:24am

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