Weekly Wrap: Some good and not-so-good news

Just when things were looking brighter we have some more bad news. As we report in Good Returns and depositrates.co.nz today, Clegg and Co is the latest finance company to go under.

Friday, October 5th 2007, 3:30PM

This time the issue appears to revolve around related party loans, something investors have been told to be cautious about.

Secondly the receivers of Five Star Consumer Finance have given their preliminary view on the likely recovery rate for debenture holders and the news isn't pretty. Returns of somewhere between 26 and 40c in the dollar, plus there are issues around loans made by the company.

The other, not-so-good-news, is that the NZDX-listed PINS funds are likely to experience an "interest retention event" which is not too subtle code for no interest payment this time around.

The good news is that these funds have capital protection which is unaffected and there are likely to be catch up interest payments in the future. The other good news in this sector is that there are increasing reports that reinvestment rates in good finance companies are on the way up.

Monday marked the start of the new PIE tax regime for managed funds. While this was a low-key affair, no PIE parties reported, it is a topic which made the news. First New Zealand Capital launched an international shares fund that gathers several UK listed investment trusts under a PIE structure. Also the October issue of ASSET reports in-depth on what the PIE regime means for advisers and investors.

The other important news on Good Returns for advisers this week was an update on the all-important new disclosure regime being implemented by the government. Full details about where these rules are at can be found here.

Amongst the people news this week we have had ING adding to its workforce with two new appointments, and the IFA filling its vacant board seat.

News which may hearten financial planners, but not property investors, is that there are increasing signs that the housing market is slowing down. At landlords.co.nz there is a story on the state of the market in Auckland. The results of this monthly report can be a little volatile, but as one commentator said yesterday: "The housing slowdown is gathering pace and we expect further confirmation of this in REINZ data next week." To join the Landlords newsletter and get the latest news on this market click here.

Readers interested in the property market will also be pleased to see Good Returns latest home loan report. There have been further cuts to fixed rates over terms of two to five years from some finance companies and non-bank lenders but some one-year rates have increased. The major banks, however, are maintaining identical rates over all terms. Also in the Mortgage Centre we have the latest news on bank market share of the home loan market.

Lost Property - 20th Anniversary Edition
by Olly Newland
Many people remember with a shudder the massive stockmarket crash around the world in 1987. In New Zealand, as in many countries, it came on the back of an unprecedented share and property boom when huge sums of money could be made for the asking.
In this special edition, released for the 20th anniversary of the 1987 crash, Newland reflects on how much - and how little - has changed since then. He shares valuable insights into the crash, drawing lessons from his own and others' experience in those frenetic days. [more]