NZF Group (NZF and NZF010)

[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.

[invessi]

Lets not be picky Alan, the company has at least turned the corner for the better and if the new partner is Resmac, I think we will see something spectacular.

http://www.resimac.com.au/

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.