News Round Up: September 19

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Regulators talk but aren't telling; Investors offered new type of pie; The case for investing in China and India (again); Don't hold out hope for a new job in finance sector.

Sunday, September 18th 2011, 5:16PM 1 Comment

A new Council of Financial Regulators has been established to foster cooperation between financial and prudential regulators.

The council's permanent members are the Reserve Bank and the Financial Markets Authority (FMA).  Associate members are The Treasury and Ministry of Economic Development. 

RBNZ governor Alan Bollard says the council shows that the two key financial services regulators are talking together regularly and at a high level.

FMA chief executive Sean Hughes said: "We aim to implement a new era of cooperation and information sharing that will result in better, more informed regulation of New Zealand's capital and financial markets."

The council's objectives include sharing of information, identifying important trends and issues and coordinating responses to those issues, and ensuring appropriate coordination arrangements are in place to respond to events and developments.  The regulators expect that the arrangement will enable them to identify and respond more quickly to emerging common concerns in the financial system.

The council plans to meet quarterly.

Don't expect to hear too much about council discussion. It says that issues discussed will remain confidential unless disclosure is required by law or agreed by the permanent members.

Investors offered a new type of Pie

Pie Funds have launched a new fund, the Pie Australasian Dividend Fund, targeting small to medium sized listed New Zealand and Australian companies.

The fund is the second to be launched by Pie Funds, following on from the 2007 Pie Australasian Growth Fund.

Pie Funds managing director Mike Taylor said that while the fund would be similar to their first offering, "we will focus on dividend paying companies and seek to provide investors with growing dividend distributions, as well as capital growth."

Taylor said the fund was designed for the passive investor and has a minimum initial investment of $5,000.

The case for investing in China and India

The global slump in equity markets has provided investors with an attractive case to buy equities in two of the region's most contentious markets, China and India, Russell Investment's chief investment strategist Asia-Pacific Andrew Pease says.

Sliding stock prices and ongoing concern about a prolonged global economic rout has increased the attractiveness of mainland China and India as preferred markets.

"China is the standout market in the region on valuation grounds but has also been one of the worst performers. China is starting to attract the attention of value oriented fund managers and is a defensive market heading into a global slowdown."
Despite its poor performance, Russell finds India to be the most compelling market for investors considering Asia.
Pease says that the economic issues facing Asia ex-Japan seem "decidedly old fashioned" compared to the US and Europe. Asia's problems include overheating, inflation and policy tightening while problems impacting the rest of the world may see less need for policy tightening across the region.

Job prospects not flash

Employers in the finance, insurance and real estate sectors have dampened hiring expectations for the fourth quarter, according to the latest Manpower Employment Outlook Survey.

In the sector, 19% of employers expect to increase hiring (down from 24% in Q3), while no employers plan to decrease hiring. Once adjusted to remove seasonal variations in the data, the sector's Net Employment Outlook has fallen two percentage points quarter-over-quarter to +18%.

Manpower managing director Lincoln Crawley says global economic conditions have signalled caution in the sector.

He said that several financial institutions are implementing head count freezes, putting permanent hiring plans on hold until more certainty returns to the market.

One job going at the moment is CEO at Share - details here

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