Investor confidence takes a hit
News Round Up: Investor confidence takes a hit, Tyndall intl shares highly recommended, PT profit up. Comment: Vultures or eagles circling? You decide.
Monday, October 15th 2007, 5:00AM
It says confidence has pulled back from its record high of the previous quarter dropping 7 percentage points, with a net 22% of investors expecting returns over the next year to be better than last year's.
The banks says, on a month-by-month basis, confidence took a big hit in August but started to recover in September. This pattern is in line with movements in global markets.
"The epicentre for the recent global financial shockwave was the US sub-prime mortgage market, which is the part of the market that lends to borrowers of poorer credit quality," ASB head of investment services Jonathan Beale says.
"Globally, the theme of the past three months has been a shift from years of underplaying risks in the chase for returns, to one of avoiding risk at all cost," Beale says.
"While the financial markets remain jittery, the general panic that prevailed in August has died away to wariness as equity markets having since recovered in many markets."
Some of the interesting results in the survey are that confidence in bank savings accounts increased while term deposits decreased. This is odd considering banks have been reporting strong flows into TDs following the finance company sector meltdown.
Rental property remains the most popular asset, in terms of confidence in returns. However, managed funds seem to be winning favour with investors.
Confidence in funds has increased slightly from 11% to a net 13%. "This will be an interesting investment option to watch over future surveys with the new PIE taxation rules coming into effect," Beale says. "With PIE, after tax returns from managed funds held by individuals may increase if a tax rate of 19.5% or 33% is prescribed."
KiwiSaver also featured positively in the survey. Awareness of the scheme increased from 90% in the previous survey to 94%.
Seventy six per cent of those aware of KiwiSaver now believe it will encourage New Zealanders to save for their retirement and around a third of respondents using or intending to join a KiwiSaver scheme intend to use it as their primary savings vehicle, ASB says.
Tyndall intl shares highly recommended
Morningstar has given Tyndall's international shares strategy the big thumbs up with a "highly recommended" rating.
"Kiwi investors in Tyndall's international share funds should continue to benefit over the longer term from submanager Capital International's deep research resources and measured approach," the researcher says in its latest report.
It says the fund has a growth style concentrated towards large capitalisation stocks.
Comment: Vultures or eagles circling? You decide
So the legal eagles, or should they be called vultures, are now circling the decaying remains of collapsed finance companies looking for options to take legal action. [Read this comment piece and replies to date here]
PT profit up
Public Trust says its net profit for the year to June 30 has increased from $2.1 million in the previous year to $3.4 million, helped by strong investment returns.
Chief executive Grenville Gaskell says this year's annual result is significantly ahead of last years and was boosted by material investment gains.
"It is pleasing to see a continued improvement in core business performance. Excluding investment gains, the pre-tax performance of core operations improved by $1.5 million, continuing the trend of the past three years."
Income before operating expenses increased 10% to $60.2 million. The PTO prepared 23,000 wills during the year, 2,000 more than last year.
During the year Public Trust's Corporate Trustee Services was appointed as trustee to two KiwiSaver default provider schemes.
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