[Weekly Wrap] Talk about falling rates

Two themes come to mind this week with our news. One is communications and the other is falling interest rates.

Friday, December 5th 2008, 4:32PM

Earlier we ran a piece about some research out of Australia that highlighted the importance of communication in keeping investors and clients happy. It seems like motherhood-and-apple-pie, but it isn't something which is always done well. Around the same time I sat in on part of the Hanover roadshow to investors in Hamilton. This struck me as an example of a company doing a pretty good job on communication. (Note, I make no judgment on the content of the company's presentation, nor the merits or otherwise of its debt restructuring proposal. If you want to know what to consider, read this piece from the Securities Commission).

I wrote about this in a Blog and made a comparison with another company with troubled investments. This Blogis well worth a read and I would value your comments. No doubt it has upset some people, but that wasn’t the intention. Rather it is raising a valid issue.

My second theme is falling interest rates. With the 150 basis point cut in the OCR yesterday home loan rates have tumbled and so too will deposit rates. This raises an fascinating conundrum about asset allocation.

On GoodReturns.co.nz this week is a great piece by David Chaplin on the subject. Essentially rates are getting so low there is no real return, so investors will have to look to growth assets again.

That's one of the reasons why I have been excited to see some growth asset offers come to market recently.

As we report, somewhat exclusively, Carmel Fisher and Lloyd Morrison have launched an infrastructure fund, while ABN Amro Craigs has another private equity fund. Good stuff. And as you will see from the ad on the right, Diversified Investment Strategies is promoting its balanced fund to advisers.

If you want to know what’s happening with fixed interest investments then don’t go past depositrates.co.nz. We have been keeping up-to-date with most of the offers in the market at the moment. And there are plenty.

Not that many months ago people had written off the finance company sector, now with the government guarantee funds are flowing again. The latest McDouall Stuart report on the sector was released this week. You can:

Read about it here
Read the executive summary
Order your own hard copy of the full report here.

Also, we have an up-to-date list of who has a guarantee on depositrates.co.nz and when looking at rates you can see who has a guarantee.

While the finance company sector is pulling in money there are a number of offers in the market. PGG Wrightson's bond offer is being well-supported, we are told. Now Wellington Airport and Genesis Energy have bond offers in the market.

During the week we had news on Strategic Finance's moratorium plans and learnt that the North South Finance plan had been accepted.

Also there has been some good news for Geneva Finance. It reports that BOS has recommitted to its wholesale funding line.

The popular GoodReturns.co.nz Insurance news has plenty to offer too. AIG Life has just released details of its latest product enhancements which, it says, are part of an on-going programme of improvement and innovation to help meet the needs of Kiwi business and families. Also Russell Hutchison has his latest opinion piece: Think big for risk.

Have a great weekend.

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