Weekly briefs

Sovereign gets @ Work, Bank accounts rule, FMG's new syndicate, ASB to list?

Tuesday, October 12th 1999, 12:00AM

ASB Bank subsidiary Sovereign has done a deal with government-owned @Work to sell accident compensation to self-employed people.

Like other insurers Sovereign has decided not to have its own workers compensation product, rather it has taken the option of selling another company's contracts.

The arrangement is seen as a way for @Work to fast-track its road to profitability.

In its recently released annual report @Work recorded a deficit of $15 million and just $260,000 of premium income. These results include set-up costs and cover less than two months of earnings.

Fusion has the lions share of the privatised accident compensation market.

Bank accounts rule

The favoured form of savings and investment continues to be in a bank account, the latest WestpacTrust McDermott September quarter confidence survey says.

It says 53 per cent of survey respondents pick a bank account, term deposits and shares are the next two favoured forms of saving at 18 per cent and 14 per cent respectively.

The survey also asks people what they would do with a $5000 windfall. Twenty two per cent of respondents said they would save it, 9 per cent would invest it and 32 per cent would use it for debt reduction while 34 per cent would spend it.

A positive feature of the survey is that expected savings intentions rose with 34 per cent of respondents expecting to save more over the year, while 19 per cent expected to save less.

FMG's new syndicate
Farmers Mutual Group has launched a new property syndicate, Tri-City Properties, which holds three buildings all tenanted by supermarket chain Big Fresh.

The total purchase price for the three properties, located in Auckland, Tauranga and Napier, is more than $25 million, plus acquisition costs and preliminary expenses.

Tri-City Properties is FMG's fourth syndicate and brings its investment portfolio to more than $90 million. This latest offer consists of 2300 parcels of shares and mortgage bonds. Each parcel comprises 1000 shares of $1 each and one mortgage bond of $4000.

FMG is forecasting the fund will yield 9.5 per cent annually. The mortgage bonds will bear an interest rate of 11.875 per cent which is equivalent to 9.5 per cent annually over the whole parcel of 1000 shares and one mortgage bond.

ASB to list?
ASB Bank is in the early stages of assessing a sharemarket listing,

"The bank is at a very early stage in assessing its options," managing director Ralph Norris says. No decisions have been made, or preferred options identified, or indeed whether or not we will proceed."

ASB is owned 75 per cent by Commonwealth Bank of Australia and 25 per cent by the ASB Bank Community Trust.

Any decision on a separate listing, or any other form of structure for ASB is a decision for the two shareholders, Norris says.

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