News Round Up: June 19

New financial literacy centre; Putting the ex into forex; Equities still in fashion with fund managers.

Monday, June 20th 2011, 7:32AM

Better financial literacy to boost economy
Improving New Zealander's knowledge of personal financial issues will help contribute to a healthier economy based on more savings and less debt, Finance Minister Bill English said.

Speaking at the launch of the New Zealand Centre for Personal Financial Education in Wellington English said better financial literacy, "is not only good for the economy - it also helps individual New Zealanders make better decisions about their own personal finances."

He said the new centre was consistent with Government aims to move the economy from excessive borrowing, consumption and Government spending.

"We want to build faster growth based on savings, exports and productive investment. New Zealanders understand that challenge and we're already seeing some early signs of progress, with households saving a bit more and paying down debt.

"The Government has taken several steps to encourage savings by reducing tax on savings and company profits, and providing extra resources to protect investors through the new Financial Markets Authority."

Putting the ex into banks forex
Currency Fair, the world's first online person-to-person foreign exchange marketplace, has launched its services in New Zealand, allowing users to cut banks out of their currency exchanges.

Currency Fair works by matching two people with complementary currency exchange needs, putting the two together anonymously over cyber space and allowing a safe and secure transaction.

Managing director Brett Meyers said that due to their small scale, advisers, small businesses and expatriates had been unable to get the best rates from banks.

"We've all seen how the peer-to-peer model has revolutionised betting. Now, after several years of work, we've applied the same concept to currencies. But of course, here there is no gambling and the only organisations that risk losing are the banks and internet forex providers."

Equities still in fashion with fund managers
Over four in 10 global fund managers (44%) continue to hold an overweight view towards equities in the second quarter of 2011, while another 44% shifted their view to neutral according to the latest HSBC Fund Managers' Survey.

All the fund managers were overweight towards equities in the first quarter of 2011 and 13% turned bullish towards bonds and cash in the second quarter.

Glen Tonks, head of wealth at HSBC New Zealand, said "While fund managers plan to diversify exposure into bonds and cash, 44% remain bullish towards equities. HSBC remains cautiously optimistic on risky assets."

He also said more than half of fund managers were bullish on emerging markets equities (56%).

"We have seen New Zealand investors this year increasing exposure to structural growth emerging markets, with the BRIC markets and Asia ex-Japan receiving good inflows."

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