News Round Up

The New Zealand Property Institute property and construction confidence index has continued its downward trend and fallen to its second lowest point since the index began in December 1999.

Property Institute chief executive Conor English says that the index has halved in the past five months, from a peak of 110 in November 2002 to 50 in February 2003.

"The threat of war in Iraq appears to be having a substantial impact on the mood of the construction property sectors," English says.

"Auckland is now less confident than Wellington on a three month rolling average, a reversal of the previous 12 months data."

Things don't look like improving in the near future. The outlook over the next 6 months sees those who believe it will "get worse" rise from 18% late last year to 34%. Total "better" has dropped from 32% to 23% and "stay the same" dropped from 49 to 41%.

The rating outlook for the bank's bank financial strength rating remains stable. The action follows the negative rating outlook applied to other rated members of the AMP Group.

Moody's stresses that AMP Bank continues to play an integral role in AMP's Australian business operations.

AMP Bank has recently changed its strategy and is focussing on low-risk core banking products and to emphasise the cross-selling potential with the rest of the AMP Group.

Moody's views this strategy as realistic and with the potential to boost the bank's financial condition over the longer term. However, the implementation of this strategic realignment is still in its initial stages.

Meanwhile the rating agency has assigned a negative outlook to the ratings for the AMP Group.

It says the negative outlook largely reflects the potential for continued pressure on earnings for AMP overall, and in particular the ongoing issues in returning the Group's UK operations to sustainable profitability.

Elders doing OK
Elders Finance has reported a record half-year after tax operating surplus of $10.9 million up 121% on the previous corresponding figure of $4.9 million.

In addition to Elders, the group's other financial services businesses, Nationwide Finance Ltd, United Finance Ltd, FAI Finance Ltd, Australian Finance Direct Ltd, Elders Home Loans Ltd and Leasing Solutions Ltd, were experiencing similar growth.

As a result, both Elders and its parent company Hanover Group Ltd, have revised current year profit forecasts from $40 million to $44 million.

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