News Round Up

Investor confidence falls. BNZ selling share fund business? Another report on Pengana, Share options start next month, Existing note offers grandfathered, Tough conditions hit Spicers.

Sunday, July 24th 2005, 2:16PM

Investors more cautious about future returns
Investors still consider residential property is the asset which is likely to give them their best returns, well ahead of bank saving accounts and term deposits, managed funds and shares.

In the latest ASB Investor Confidence survey 21% of respondents expected residential rental property to provide the best return over an indeterminate horizon. [MORE]

BNZ selling share fund business?

Bank of New Zealand is reportedly selling its local share fund business according to the Sunday Star Times. It says potential buyers include the likes of AMP, AXA and Tyndall, however there are other firms in this space.

Most recently Fisher Funds bought the Coronet's Australasian equity fund.

Another report on Pengana
The Pengana Emerging Companies Fund has had another positive ratings report As first reported by Good Returns, S&P rated the management as competent.

Morningstar in Australia has also produced a report that rates the fund as recommended. Like S&P it points to the track record and pedigree of its managers as a strong factor. To read an updated fund report click here.

Share options available next month
Five share options will list on the Sydney Futures Exchange (SFE), covering some of the NZX market's most liquid stocks. The companies covered by these options are Carter Holt Harvey, Contact Energy, Fletcher Building, Telecom and The Warehouse.

NZFOX products are New Zealand futures and options contracts listed and traded on the SFE. They are based on securities listed on NZX's markets and New Zealand investors will be able to buy and sell them, in New Zealand dollars.

NZX has been working since late 2004 in order to ensure the market is prepared for the launch. "We believe an August launch is right because we have firms ready and available to trade and we believe market conditions right now present investors with some interesting investment choices," NZX head of markets Geoff Brown says.

"Derivative products, like options, are a feature of a mature market. Options present more opportunities for New Zealand investors to make money from New Zealand equities," Brown says.

Existing note offers grandfathered
The Government is closing a “loophole” to prevent Australasian groups of companies abusing the New Zealand tax rules on dividends and imputation credits, Revenue Minister Michael Cullen says.

The proposed legislation amends income tax law to prevent companies from allocating imputation credits to dividends paid to New Zealand investors if the payment of the dividends results in tax deductions in Australia.

Two existing issues, CBA and Fairfax notes, are to be grandfathered and will not be affected by the proposed tax changes. Fairfax should run through to June 15, and the CBA offer is expected to run for its full 10-year period.

Demand for both offers is expected to rise now, on the basis that there will no be no more deals like these coming to market.

Tough conditions hit Spicers
AXA says its funds flow from advice in the Australian and New Zealand markets was down in the six-month period to June 30. It says advice net flows were down 27.3% to A$181.1m (compared to A$249.0m in the corresponding period last year, due mainly to reduced flows in its New Zealand advice business, Spicers.

AXA says the market environment continues to remain difficult in New Zealand. “Recently proposed changes to New Zealand's savings and tax regimes should improve the market environment in due course.”

United on Unlisted
United Future finance spokesperson Gordon Copeland wants the government to abandon its intentions to impose new regulations on Unlisted – an alternative sharemarket trading platform.

“The uncertainty created by the government’s announced intentions in this regard is completely unacceptable,” he says. “Like any business, Unlisted should not have to face this kind of uncertainty which has brought rapid expansion to a standstill.

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