Sell-down of NZ state energy companies

BusinessDesk: Sell-down of NZ state energy companies would gross $6.8 bln, latest valuations show

New Zealand’s sell-down of state-owned energy companies would gross about $6.8 billion, provided investors agree with the latest valuations by investment banks and research houses.

The valuations, published on the Crown Ownership Monitoring Unit website, are about $2 billion higher than the stock exchange operator, NZX, had assumed in its review of its index methodologies, which was announced last month. Read More

Eurozone ministers begin frantic search to fill shortfall in bailout fund

New pressure on Greece and Italy after US and emerging powers refuse to commit fresh funds at G20 summit

Eurozone finance ministers will on Monday night begin a frantic search for new sources of capital to boost the area’s main bailout fund to €1 trillion after the US and emerging powers refused to commit fresh funds at the G20 summit last week.

With financial markets braced for another day of volatility, the embattled finance ministers will also put pressure on their counterparts in Greece and Italy to take the measures necessary to ensure the survival of the eurozone.

At the meeting in Brussels, Giulio Tremonti, the Italian finance minister, will be required to produce detailed evidence that his country can reduce its €1.9tn (£1.6tn) debt and reboot its economy within a year. His counterpart in Greece, Evangelos Venizelos – who could be the new premier – will also be told that Greece will not receive the €8bn overdue instalment of the original bailout until a genuine national unity government is in place that accepts in full the terms of the second rescue plan – worth €130bn – adopted at a eurozone summit on 27 October.

 

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NZ super fund hit hard by world markets

The New Zealand Superannuation Fund, a state-owned nest egg to help fund Kiwis’ future superannuation payments, lost further ground in September to close at $16.63 billion.

The fund lost 3.6 per cent of its value during the month, taking its total losses to 11.1 per cent for the first three months of the financial year.

The fund, which is ring-fenced until 2031, is heavily invested in overseas equities on the basis that they will make bigger gains over time.

It did well in the year to June, rising 25 per cent to reach an all-time peak of $19 billion, after slumping two years earlier during global financial crisis.

During the financial crisis, some commentators said the money should be pulled out and used to pay Government debt.

Perhaps anticipating a similar backlash this year, Super fund chief executive Adrian Orr last month pleaded for taxpayers to be patient with peaks and troughs.

Since 2003 the fund has returned 6 per cent on an annualised basis, a rate of return 0.5 per cent more than the Treasury Bill rate which it aims to better.

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A better deal on back of bank’s big profit

Bank customers who are paying high fees or interest rates should be negotiating a better deal in the face of a massive increase in profit by the country’s biggest banks, experts say.

Three of the four main banks this week reported a collective $2.15 billion profit as the economy gradually turns the corner and the risk of borrowers defaulting reduces.

Consumer New Zealand chief executive Sue Chetwin said the bank profits were “mind-boggling” and consumers should negotiate fees and interest rates when taking out a mortgage.

Consumers were more likely to complain about the number of fees they were charged and the high interest rate charged on credit cards, than the cost of individual fees. That could be due to most of the banks having dropped penalty fees for bouncing or honouring payments when there were insufficient funds in the account.

The Australian-owned banks also generally charged higher fees in Australia than in New Zealand.

But “they are incredible profits and it does leave you scratching your head about fees that they are charging ordinary consumers,” Chetwin said.

 

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Understanding the psychology of money

Many a love match has failed thanks to irreconcilable financial differences. Yet partners with different money personalities can work well together if they know how.

Not everyone thinks the same about money. One Kiwi spilled the beans on Trade Me’s forums about her husband, whose approach to money left his pregnant wife scrambling to pay the bills by selling off their belongings online. Jenniebee’s story, which can be read at http://tinyurl.com/6ypb9ym, revealed two loving individuals who couldn’t understand each other’s approach to money.

Financial adviser Liz Koh became interested in the psychological side of money because she saw too many clients making little progress in creating wealth despite earning good incomes.

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