investment

Prices are stable; some people say that’s bad

The NZ Herald has a business editor who would like you to know why low inflation is terrible.

– Low inflation remains one the biggest risks facing the global economy although it seems like a subtle problem relative to the political turmoil that has dominated the past few months.

– New Zealand’s remained stuck at 0.4 per cent, in the year to the June 2016 quarter. That’s below Reserve Bank expectations of 0.6 per cent. And well below its target band of one to three per cent and ideal average mid-point of to per cent.

– When prices are stagnant so are wages. Business margins are squeezed by price pressure and the focus goes on costs rather than expansion.

– Low inflation can also prompt consumers to delay spending on big ticket items on the expectation that prices will fall further. This further squeezes businesses.

– Lower than expected inflation puts more pressure on the Reserve Bank to cut interest rates to stimulate the economy and bring the value of the kiwi dollar down.

That might be good news for mortgage holders but really interest rate cuts aren’t a sign of a strong economy. For many older savers this is bad news. Read more »

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ACT slips the knife into National’s back over potential new land tax

The contrast of dogmatic policy versus pragmatic politics couldn’t be more obvious.

ACT says imposing a land tax on foreign buyers would break a National election promise, but John Key believes the Government’s respond to changing circumstances.

The Prime Minister has said it may be considered if there’s evidence foreign speculators are having an impact on Auckland’s overheated market.

If the tax is imposed, it could also apply to New Zealanders living abroad after an exemption period.

ACT leader David Seymour, who has a support agreement with the Government, says National promised during the 2014 election campaign there would be no new taxes.

“The introduction of a land tax would be a broken promise,” he says.

“Property rights are meant to be protected by centre-right governments, but it looks like National is too busy trying to put Labour out of a job.”

Read more »

Labour will be pleased, actual Chinese, ones with real Chinky-sounding names, aren’t so keen on NZ for investing any more…for now

Phil Twyford will be pleased. So will Andrew Little and the rest of the Labour caucus…it seems Chinese aren’t that fussed on New Zealand any more for investment.

But it appears it is a short-term blip.

The head of a company that helps Chinese buy properties overseas says New Zealand’s popularity ranking has slipped a notch since the Government and Reserve Bank introduced new buyer restrictions last October.

Juwai co-founder Simon Henry said New Zealand shifted to fifth from fourth most popular country in the world with potential property buyers in China between the third and fourth quarters of 2015.

But Henry, whose Chinese language website has 2.6 million unique users monthly, predicts Chinese buyers’ interest in New Zealand will return in force by mid-year once they’ve fully digested the new requirements.     Read more »

Chinks no good, but Seppos OK

The opposition have mounted their race based attacks on farm and other real estate ownership, decrying people with Chinky sounding names from even bidding on the real estate offered.

But it turns out that Seppos are the largest foreign owners and we haven’t heard a squeak about them owning farms.

United States interests were the biggest foreign investors in New Zealand dairy land in 2013 and 2014, followed by China, according to a report by KPMG.

The consultancy’s analysis of foreign direct investment decisions by the Overseas Investment Office showed the US accounted for 54.4 per cent of the freehold hectares sold over the two-year period, followed by China with 11.7 per cent and Sweden with 5.9 per cent.

By value, the breakdown was 26.5 per cent for the US, 21.3 per cent for China and 10.8 per cent for Britain.    Read more »

Labour have been hating on the wrong people – it’s Canadians that own most of our stuff

It isn’t people with chinky sounding names…it is Canadians who are our largest foreign investors.

A new report reveals Canada was the dominant foreign investor in New Zealand in the last two years.

The study by financial services firm KPMG found Canada accounted for 22 percent of overseas investment in 2013-2014.

It looked at major transactions, but did not include residential property.

China – though by far the biggest foreign player in the dairy sector – was second on overall investment with 14 percent, followed by the US (13 percent) and Australia (11 percent). The US was the biggest buyer of land in that period.   Read more »

The real reason why house prices are rising rapidly

Labour would have you believe that rising house prices is the fault of people with chinky sounding names.

They also say we need a capital gains tax and possibly a stamp duty and restrictions on those yellow investors to halt the rise of house prices.

Even John Key is reacting by suggesting that perhaps a non-resident withholding tax could be deployed.

But the problem won’t be solved with any of those “solutions”.

The ANZ Bank has some new research which gives some insight into the real causes of rising house prices…and it will frighten most politicians.

In a paper on housing affordability released on Friday, ANZ Research said it was low interest rates and cheap mortgages that were contributing to the rapid growth in house prices, particularly in Sydney, rather than tax policies like capital gains tax concessions or negative gearing.    Read more »

St. Brian Gaynor on the regulators, we couldn’t agree more

MAM

Sanctimonious hypocrite St. Brian Gaynor had this to say back in 2008.

The recent criticism of the Securities Commission, particularly in relation to the finance company collapses, is justified. The commission has disappointed investors in several areas as it has a tendency to promise too much and deliver too little.

The organisation’s primary purpose is “to strengthen investor confidence and foster capital investment in New Zealand by promoting the efficiency, the integrity and cost effective regulation of securities markets”.

It aims to achieve this through enforcement, recommending law changes, issuing rule exemptions, authorising and approving market participants, co-operating with international agencies and promoting public understanding of markets.

Read more »

Who is the alleged Dirty Trader at Milford Asset Manipulation?

On Saturday, we covered the Herald’s ongoing publication of Brian Gaynor’s column. This is despite his firm, Milford Asset Manipulation, coming under intense scrutiny due to a complaint to the FMA from the NZX (no less) over alleged stock price management.

Hang on, I might have that wrong. I meant Milford Asset Management under fire for alleged manipulation.

It beggars believe that Gaynor still gets to publish his column in the Weekend Herald, but I guess when you advertise heavily with NZME. (the Herald’s parent company), then the Herald gives you a get-out-of-jail free card when it comes to allegations of bad news.

Given that Milford have a mandate to buy and sell shares on behalf of the NZ taxpayer, as well as the savings of tens of thousands of private citizens in NZ, I think we deserve a little more sunlight on the goings ons at this company under fire for allegations of stock manipulation. Through a process of elimination we can shine a bit more light where Milford might prefer to keep us in the dark.

We know that Milford have six portfolio managers (which have been euphemistically described as “traders”), plus Brian Gaynor himself as Executive Director and Chairman of the Investment Committee, which technically makes him ultimately responsible for his team‘s behaviour.  Read more »

Will the Herald go after their own columnist like they go after Hotchin

Herald columnist Brian Gaynor was forced to apologise to Mark Hotchin for defaming him. The Herald buried their apology to Hotchin on page B12 and never put it online.

Gaynor also famously and rather breathtakingly said about Dirty Politics:

The integrity of our capital markets is very dependent on public issuers putting the interests of investors first and having regulators willing and able to take action when there are allegation that this important principle may have been breached.

In my experience being subject to defamation claims can leave you feeling intimidated and unable to write about a controversial subject.

Hopefully our regulators haven’t felt the same level of intimation and restriction when they have been attacked though blogs, social media or other communication forums.

Which is all rather ironic given his current predicament and his admitting to being a proven defamer of others under investigation by the FMA while raging a war against them in the vehicle he used, a New Zealand Herald column.

High-profile fund manager Milford Asset Management has confirmed it is being investigated by the Financial Markets Authority over alleged market manipulation.

“The investigation concerns an individual trader employed by the firm and certain specific trades,” the company said.

“Milford and the trader concerned are co-operating fully with the FMA.”

The company said the investigation does not have implications for client funds and has no impact on day-to-day operations at Milford.

“Milford looks forward to completion of the investigation,” the firm said.

Irony pours itself into the oversized wine glasses of Auckland’s financial community, as the rumours of market manipulation are confirmed as allegedly involving top firm Milford Asset Management.

Milford Asset Management is owned in part by (Saint) Brian Gaynor, whose weekly columns in the Saturday Herald have been a pillar of prudence and righteousness. Gaynor’s columns have railed forth against many in the NZ business community for the failings that he has perceived or alleged.   Read more »

NY Supreme Court says websites don’t have to reveal their anonymous contributors in potential libel cases

Another case in the US upholds the rights of bloggers and online media to protect their anonymous sources and contributors.

Joshua Benton at Nieman Journalism Lab writes:

Seeking Alpha is a site for people to write up and share their investing ideas —“a platform for investment research, with broad coverage of stocks, asset classes, ETFs and investment strategy.” Some of its contributors use pseudonyms, and earlier this year, someone using the nom de investissementof “Pump Terminator” wrote a piece arguing that a company named NanoViricides was wildly overvalued and using sketchy business practices.

NanoViricides went to court, demanding that Seeking Alpha turn over the real identity of Pump Terminator so that it could pursue a libel claim against him or her. Seeking Alpha fought it, and now, in what the site is calling a victory for free speech, the New York Supreme Court has denied NanoViricides’ demand. (You can read the court’s opinion here.)

Of interest: The very nature of open crowdsourced platforms — the ruling lumps them together under the rubric of “message boards,” though that seems imprecise in 2014 — makes it harder to pursue the sort of claim NanoViricides was trying to make. Quoting an earlier ruling (emphasis mine):

[i]n determining whether a plaintiff’s complaint [or pre-action petition] includes a published ‘false and defamatory statement concerning another,’ commentators have argued that the defamatory import of the communication must be viewed in light of the fact that bulletin boards and chat rooms ‘are often the repository of a wide range of casual, emotive, and imprecise speech,’ and that the online ‘recipients of [offensive] statements do not necessarily attribute the same level of credence to the statements [that] they would accord to statements made in other contexts.’ 

Read more »