News round-up

Securities and Financial Advisers Amendment Bills passed; Rental property tops investor confidence survey as optimism grows; Infrastructure bonds better than PPPs; Retail funds flow turns negative; Taskforce to probe NZ productivity

Monday, July 27th 2009, 5:24AM

Securities and Financial Advisers Amendment Bills passed
The Securities (disclosure) Amendment Bill was passed by Parliament last week, making it easier for businesses to raise capital and supply prospective investors with relevant information.

The bill amends the Securities Act on the recommendations of the Capital Market Development Taskforce and allows businesses to issue a simplified disclosure prospectus that will do away with duplicated information many businesses face when making a securities offer.

"The bill will help reduce costs and time for companies raising capital in this financially challenging environment, while ensuring the timely disclosure of information to investors," Commerce Minister Simon Power said.

The Financial Advisers Amendment Bill also passed its third reading at the end of last week.

"This bill makes some relatively minor changes to the Financial Advisers Act which will ensure that the regime works as efficiently as possible," Power says.

Rental property tops investor confidence survey as optimism grows
Rental property reclaimed its top slot in ASB's latest confidence survey, which showed investors became less negative in the second quarter amid signs the global economy may be over the worst of its slump.

New Zealand investors confidence improved to -11% from -25% in the latest three months, the first pick-up in the measure since the third quarter of 2008, according to a report from ASB. Some 18% of those polled said rental property offers the best return, up from 15% three months earlier. Bank savings slipped to second place at 17%.

ASB's survey showed managed funds didn't rate highly in the latest quarter, falling 1% to 9%, though confidence in such funds rose in June.

Confidence in KiwiSaver picked up, with the percentage of respondents deeming it adequate to cater for their retirement rising 3 points to 23%.

Infrastructure bonds better than PPPs
The Green Party has called for the government to create infrastructure bonds for New Zealanders to invest in, rather than raise financing via the failed public-private partnership (PPPs) model.

The call comes after the New Zealand Super Fund announced last week it would put $100 million into PPP investment funds.

“All the evidence is that PPPs don’t work because taxpayers take all the risk while the private sector takes all the profit,” Green co-leader Russel Norman says.

“Infrastructure bonds allow everyday New Zealanders to put their savings into secure investments that benefit the whole country, while at the same time avoiding private control of what should be public assets.”

Retail funds flow turns negative
After three consecutive quarters of positive funds flow, the June 2009 quarter net fund flows were negative, at minus $70 million, according to FundSource.

However, over the 12 month period to June, net fund flows totalled a positive $1.4 billion.

Inflows into KiwiSaver products have continued to be the key driver of funds flow into New Zealand retail managed funds over the past year.

KiwiSaver funds experienced a positive net flow of $348 million in the June quarter, which bought the total net flow for the year ending June 2009 to $1.85 billion.

Other than inflows to KiwiSaver, net funds under management figures appear in line with expectations, given current market conditions, according to FundSource.

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