News Round Up

Financial Forecasts, Private Capital late bloomer, Public Trust a possible bank, AJ and AIA take a risk, Tower looks East.

Sunday, February 6th 2000, 12:00AM

The next 12 months promises to be an interesting, and changeable time, for the personal investment industry. The new Government will be changing some of the framework and superannuation will become a "live" issue.

On the markets fronts, investors wonder whether the US bull market can keep going and whether the New Zealand market will finally realise some of its potential.

To help you focus on the key issues of the next 12 months, Good Returns in association with BNZ, bring you Financial Forecasts - Your blueprint to the year ahead. Go to the Special Report section to read this series of articles.

Private capital a late bloomer
Private capital, as an alternative form of equity investment is growing exponentially in New Zealand, according to one of its proponents, AMP Asset Management.

AMPAM head of private capital, Martin Turner, says that New Zealand now accounts for almost a quarter of all the private capital activity in Australasia, whereas 18 months ago it was more like five per cent.

The latest private capital transaction was completed last week when Donaghy successfully completed its management buyout and was delisted from the New Zealand Stock Exchange.

Turner says that although private capital is a new asset class here, offshore it is well established as a major form of investment. In 1999 a record US$95.5 billion was invested into private capital in the United States.

"There were 113 private capital deals in New Zealand and Australia in the September quarter of 1999, with over $A208.35 million being invested. These are record levels of investment and my pick is for this investment activity to continue to build for some time yet," Turner says.

AMPAM's private capital public offering closes on February 25.

Public trust could be a bank

Deputy prime minister Jim Anderton has floated the idea of using the Public Trust as bank.

He says over the next two years the PTO will be modernised to allow it to improve its services and products.

Currently the PTO manages $6 billion of assets and has reserves of $86 million.

Anderton says the PTO won't be converted into a State Owned Asset, nor will it be privatised.

AJ's risk products nearly here
Armstrong Jones is extending its range of services to offer a range of insurance policies that are underwritten by American International Assurance (AIA).

The CoverGuard Insurance Plan offers; life cover, total permanent disability, critical illness and health cover.

Tower looks East
Tower Corporation wants to expand its reach internationally and has applied for a life insurance licence in China.

Group managing director James Boonzaier says expanding into Asia has been one of the group's strategic goals for sometime. It had looked at a number of markets and concluded China, which has a rapidly growing life market (50 per cent annually) was the best bet.

He says it will take some time to go through the licensing process, in the meantime Tower has established an office in Beijing.

Boonzaier says Tower's history of moving from a government department through to a privatised, listed company may be a useful selling point in China as that is the route many Chinese companies were following. Other selling points include Tower's track record in product development, and its success in managing mergers and working in other countries, plus New Zealand's good relations with China.

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