NZF Group (NZF and NZF010)

[Tony Two Gloves]

Yes I get the Direct Broking emails to....

I still think they will get srewed over in light of their financial performance over the last few years and all the others issues around S&P. The devil will be in the detail.....

[Newman]

NZF promised to donate 0.25% of the deposits received by May 31 to Red Cross to help Christchurch rebuilding. It has not revealed the amount of donation. Does it suggest little new deposits thus little money to donate?

Would new shares be issued to the new business partner(s) at current share price 2-3 cents? If so, those who converted notes to shares would be a losser.

[Greentea]

Interesting, since the good news where has all the gossip gone?

[Enumerate]

Interesting, since the good news where has all the gossip gone?

We know that:

1) The long term lending part of the business will be partially sold down to the new partner who will take a majority stake.

2) The identity of the new partner is unknown - the contenders are: Liberty Financial, Resimac, Members Equity Bank, Firstmac and AMP Bank. Resimac is my pick based on NZ Herald reporting. (Liberty is an existing partner in the Pero unit; Resimac has an interest in Allied Farmers).

3) There are extreme growth prospects in the non-bank residential mortgage market. Total market in NZ is about $171b with about $4b in non-bank entities. NZF currently only has about 4% of this non-bank portion of the market.

4) Competition in the mortgage market is vital, once the OCR starts to rise. The Australian government clearly understands the need to support non-bank entities:

http://www.theaustralian.com.au/busi...-1225828937193

To its credit, the government understands the need for a healthy mortgage market and is providing small lenders with a helping hand, through its promise of a $16 billion investment in residential mortgage-backed securities by the Australian Office of Financial Management.

Benefits to NZF:

A) The Aussies clearly see vast growth prospects in long term mortgage lending, in the non-bank sector, in NZ. I agree with them ... there are SPECTACULAR growth prospects

B) Equity released from the NZF long lending unit will allow the short lending unit to be refloated. There are SPECTACULAR growth prospects in returning to this market

C) The Pero financial services distribution and real estate initiatives will be very valuable drivers of this SPECTACULAR lending growth

NZF market capitalisation is at about $3.5m. The current financial year should be the "bounce back". I expect we will gain a clear picture of the growth prospects by year end - given the collapsed state of competitors and the importance of giving the banks a competitive run - I am now expecting this growth rate to be SPECTACULAR.

[Alan3285]

... SPECTACULAR ...

I'm glad you didn't go so far as to say that the prospects were 'most spectacular', else I might have had to comment on your use of excessive superlatives.



Alan.

[Tony Two Gloves]

The only "Spectacular" thing I have seen so far is a Spectular tumble of the share price and share holder value....

I don't share your optimism Enumerate, their lending team has made some big mistakes which they will remain paying for some time and there is more to come out of the wood work. It will be interesting to see how S&P intepret this move with Resi. Also I think the Pero unit is in a bit of a mess and only barely profitable, only time will tell if the Real Estate venture will make any difference I certainly wouldn't think so in the short term. All the hype seems to have died down with this venture, the only thing they would have seen so far is marketing expeses and no income - not surprising as this was terribly timed in my opinion.

[Enumerate]

I don't share your optimism Enumerate ...

Investment is all about the future ... dwelling on the past is useful, to a degree; but what really matters is the market and the ability of a company to respond to the market.

I think market prospects are ... SPECTACULAR and given NZF Group has done very well to survive when retail debenture liquidity has evaporated I think there is cause for some optimism that the NZF Group response to the market will be SPECTACULAR.

This recovery is not going to take weeks. We do not even have ink on the partnership deal, yet. Give it a year to gauge progress and expect significant results in about two years. Hopefully we will have a long period of economic growth ahead of us.

[winner69]

Weren't Resimac the guys who came to the aid of Allied Finance ..... with an intent to invest which kept the bankers et all off Allied backs for a few months ..... and conveniently allow the Hangover thing to go through .......... until the 'intent' was found only to be that .... and the 'investment' never went ahead .... I think thats how it all worked out

Many said it was a deal that was never going to happen (consumated) but it sounded good at the time

[Enumerate]

I can't understand why they were interested in Allied - it was very far from their core lending profile. Maybe they were searching for a vehicle to do non-bank mortgage lending, in NZ?

[Enumerate]

2011 Annual Report to March is out:

http://www.nzx.com/markets/NZSX/NZF/...-Annual-Report