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  1. #31
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    Good to see NZF innovating Emunerate but don't you get the heebie greebies when the same things that essentially caused the GFC seem to be coming back into favour big time .... even reports today that Wachovia are back in the market with RMBSs

    The rating agencies got heaps of flack about how they rated these things and things don't seem to have changed much.

    The top tiers of the NZF issue are rated AAA. The profile of the underlying mortgages looks impressive with numbers like weighted average LVR of 73% suggesting pretty safe etc .... but then again 42% of them are low documentation loans .... hardly highly rated securities .... but when you bundle them up hey presto the ratings agency give them a AAA rating

    Yep and just the circus of a few years ago all these things are insured as well ..... and just maybe there are heaps of other derivates driven from the same pool of mortgages and bonds. No doubt many prepared to take the extra few points of returns

    At least NZF as the originator get the money up front so prob OK for them

  2. #32
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    There are major differences between the US RMBS market and the Australia/New Zealand markets.

    - there is a limitation in liability to the security asset, in the US - in NZ, you can be bankrupted
    - "low doc loans" in NZ/Australian parlance means loans to the self employed who "auto certify" their income stream; in the US "low doc loans" means the person has pulse ... maybe
    - this is loan syndication up - to banks and financial institutions; the US case was syndication down to the wider finance sector.

    As you point out, the risk is now with the purchasers, not NZF. However, this is not a "stitching up" exercise. I think this may be the way NZF as a "packager" and "enabler" of prime, first mortgage loans raises the capital to fund those loans. It seems like a sustainable and profitable business, to me.

    All this simply justifies, in my mind, that the NZF010s, at 60%, are too cheap.
    Last edited by Enumerate; 18-06-2010 at 10:50 PM.
    Do not consider my postings as investment advice. I am here to share research and to speculate on what might be. The boundary between fact and conjecture might not always be clear - best to treat all comments as speculation.

  3. #33
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    Quote Originally Posted by winner69 View Post
    Good to see NZF innovating Emunerate but don't you get the heebie greebies when the same things that essentially caused the GFC seem to be coming back into favour big time .... even reports today that Wachovia are back in the market with RMBSs

    The rating agencies got heaps of flack about how they rated these things and things don't seem to have changed much.

    The top tiers of the NZF issue are rated AAA. The profile of the underlying mortgages looks impressive with numbers like weighted average LVR of 73% suggesting pretty safe etc .... but then again 42% of them are low documentation loans .... hardly highly rated securities .... but when you bundle them up hey presto the ratings agency give them a AAA rating

    Yep and just the circus of a few years ago all these things are insured as well ..... and just maybe there are heaps of other derivates driven from the same pool of mortgages and bonds. No doubt many prepared to take the extra few points of returns

    At least NZF as the originator get the money up front so prob OK for them
    Winner 69

    NZF have not done low doc for a very long time however, as you point out, they are insured (insured by GE) so thats why they get an AAA rating. GE are still insuring new home loans for NZF and QBE also (not Tower as I mentioned in an earlier post).

  4. #34
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    You pop away for a while and some things change - while others don't. Hopefully Enumerate is still around as I'm a bit lost on where to post yesterdays events. NZF Sp takes a 50% hit down to an all time low of $0.10. Enumerate and I couldn't see eye-to-eye on Peter Huljich in the Huljich Wealth Management Thread but yesterdays news once again touches the Kiwisaver thread as wells as the SCF and the ALF/ANF threads. It also touches the Local Body election thread - whose voting for John Banks, Director of Huljich and significant holder of NZF (or at least they were when I last looked)?

  5. #35
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    Nothing like a bit of market manipulation. Just a single $400 trade today to drive the SP back up 100% to $0.20!

  6. #36
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    Quote Originally Posted by minimoke View Post
    Nothing like a bit of market manipulation. Just a single $400 trade today to drive the SP back up 100% to $0.20!
    I wouldn't worry about it - just work out what you think it is worth, and how much you want in your portfolio, and buy or sell accordingly.

    Most serious traders don't take any notice of such movements when there is no depth / liquidity in a given security.

    Alan.

  7. #37
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    Quote Originally Posted by Alan3285 View Post
    Most serious traders don't take any notice of such movements when there is no depth / liquidity in a given security.

    Alan.
    I'm inclined to agree - I'm not too sure there are too many people interested in this stock - as evidenced by its depth. However where the SP does become important is where a Kiwisaver fund has a substantial holding of a particular stock. The value of that stock will make a real difference to how that KiwiSaver fund reports its portfolio management. And we know that fund performance is then used in the marketing collateral. A $400 investment to double the value of a fund holding is money well spent - unless you are an investor in a Kiwsaver fund which is based on such manipulations.

  8. #38
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    Quote Originally Posted by minimoke View Post
    I'm inclined to agree - I'm not too sure there are too many people interested in this stock - as evidenced by its depth. However where the SP does become important is where a Kiwisaver fund has a substantial holding of a particular stock. The value of that stock will make a real difference to how that KiwiSaver fund reports its portfolio management. And we know that fund performance is then used in the marketing collateral. A $400 investment to double the value of a fund holding is money well spent - unless you are an investor in a Kiwsaver fund which is based on such manipulations.
    Not something I had considered!

    Alan.

  9. #39
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    To the contrary, there is quite a bit of interest in this stock, a lot of watchers waiting on some of the moves in progress to materialise, such as: AGM 22/09/2010 - "The Mike Pero brand continues to be strong in the market place which has
    insured that they have been able to maintain its market leader position. A
    number of new opportunities are being looked at to increase its presence in
    the property sector in New Zealand." Also, expecting another RMBS issue soon and launch of their insurance products!

  10. #40
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    NZF’s liquidity risk on mend with RMBS issues
    The collapse of some big finance companies recently has been an eye-opener for NZF Group which is now seeking to further reduce its reliance on debenture funding in favour of funding sources like Residential Mortgage Backed Securities.

    Tuesday, 5 October 2010
    by Sophia Rodrigues

    Such a source will not only provide the group with a cheaper source of funding, but moderate the asset-liability mismatches on its books by aligning the maturity profile of the funding with the company's loans.



    NZF recently raised $100 million via RMBS issue, earning the distinction of being the first financial institution making the issue since the global financial crisis. The company is now in the process of making another such issue but wouldn't indicate how soon that would be.

    NZF used proceeds from the RMBS issue to repay the amount drawn against the term loan facility with Westpac and the balance now stands at around $106 million from $194 million back in March. Westpac has retained the total facility at $225 million and extended the term to October next year.

    Meanwhile, NZF has also reduced its reliance on debentures with such funding making up only 15.3% of the group's borrowing from around 22% in March.

    As of March, the mismatch in NZF's asset-liability profile was stark with loans over five year-term as per contractual maturity comprising of 62% of total loans taken on an undiscounted cash flow basis. On the other hand, only about 18% are due within one year.

    On the funding side, nearly 95% of the funding was due within a year, including the entire term loan facility from Westpac, $20 million of secured notes that are due in February and a majority of debentures.

    The RMBS issue would have alleviated this mismatch to some extent and with more such issues planned a further easing in the liquidity risk on the books may be on the cards.

  11. #41
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    NZF
    12/10/2010 15:47
    GENERAL

    REL: 1547 HRS NZF Group Limited

    GENERAL: NZF: Successfully exit the Crown Retail Deposit Guarantee Scheme

    (NZF) NZF Group Limited - Subsidiary companies NZF Money Limited and Finance
    Direct Limited successfully exit the Crown Retail Deposit Guarantee Scheme.

    NZF Group Limited (NZF) is pleased to advise that its wholly owned subsidiary
    (NZF Money Limited) and 70% owned subsidiary (Finance Direct Limited) have
    successfully exited the Crown Retail Deposit Guarantee Scheme (RDGS).

    The RDGS was established on 12 October 2008 by the Government for a term of
    two years, to provide confidence and stability within the NZ banking system
    (as well as the non bank sector) at a time of worldwide financial crisis. NZF
    Money Limited (NZFM) was one of the first non banks to be accepted into the
    RDGS, with Finance Direct Limited (FDL) following shortly thereafter.

    While the RDGS achieved its objective of stabilising the market, it also had
    the adverse effect of attracting large numbers of investors only seeking a
    higher return with a Government guarantee, with absolutely no intention of
    remaining long term investors. This put unnatural pressure on cash flows
    nearing the expiry of the guarantee.

    NZFM and FDL planned out their cash flows and carefully managed their deposit
    and lending books to ensure that they could successfully manage the expected
    net outflow of investors
    that were taking advantage of the RDGS.

    NZFM and FDL would like to thank all long term loyal investors that have
    remained with them before, during and beyond the expiry of the RDGS.

    ENDS

    Malcolm Lindeque
    For and on behalf of the board of directors
    Company Secretary
    NZF Group Limited
    End CA:00200936 For:NZF Type:GENERAL Time:2010-10-12 15:47:48

  12. #42
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    In case you missed it, NZF ran a 3 column x 180cm colour advertisement in the business section of the Herald on Saturday offering depositors 9.25% for 12 months, secured by first ranking debenture stock over the assets of the company, looks like the finance company division is going to fire up again!

  13. #43
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    Quote Originally Posted by invessi View Post
    In case you missed it, NZF ran a 3 column x 180cm colour advertisement in the business section of the Herald on Saturday offering depositors 9.25% for 12 months, secured by first ranking debenture stock over the assets of the company, looks like the finance company division is going to fire up again!
    In case you missed it Invessi, one of NZF's Directors , Peter Huljich is now up on criminal charges. The Securities Commission allege he failed to disclose third party loans in offer documents and that he “misled prospective investors by misrepresenting the investment performance of the scheme's funds in offer documents.”. Innocent til proven guilty Invessi but does the news that one of NZF's directors has been accused of such practice fill you with confidence. If it does you are pretty much on your own - theres only one buy bid at the moment and thats at 10 cents which as low as this stock has ever gone.

  14. #44
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    Minimoke, I have to say it is regretable that PH has been targeted, there are others far more worthy of prosecution in my view. I am inclined to agree with Phil Macalisters blog this morning on Good returns (below). As to the share price, I don't see that changing much until we get a good news story and they start paying dividends again!

    I thought it was worth having a go at trying to defend Peter Huljich. As readers will know the Securities Commission laid criminal charges against Peter Huljich and Huljich Wealth Management (HWM) for allegedly misrepresenting its KiwiSaver funds to the public.

    Since this story broke there has been plenty about it including a comprehensive statement from Huljich about what happened. This is detailed elsewhere on Good Returns.

    As part of the background Huljich has acknowledged there was a mistake, stepped aside from his role and offered make ups to its KiwiSaver members.

    Now the Securities Commission lays criminal charges against him which, if proven, could result in time behind bars.

    The so-called victims of this alleged crime haven’t lost money and have been told that if they are unhappy about HWM they can switch to another of the many KiwiSaver providers in the market place – for free.

    Here’s the bit I don’t understand – why is the Securities Commission taking this action when there are plenty of other potential cases where investors were deliberately misled; are real victims as they lost money and are now suffering. Secondly, did Huljich really top up the funds without anyone else associated with the business knowing?

    I don’t know if Huljich set out to deliberately mislead investors, and unless there is some smoking gun then it would be hard to secure a conviction.

    Likewise it is incredibly difficult to believe the Huljich took the actions he did and no one else knew anything about it or raised any objections.

    The directors who signed off the accounts should be included in any criminal proceedings the Securities Commission pursues.

    So too should Trustees Executors which is both the trustee for the fund, and the fund administrator.

    With this latter role the company must have known what happened and approved it. If it had doubts it should have walked across the room and raised it with trustee.

    Looking at the 3rd Annual ASSET Magazine KiwiSaver survey it is clear that HWM has done well signing up members.

    Indeed our analysis of data shows that HWM was one of the most successful managers in the year to March 31 at signing up new members and had the highest growth in FUM at a whopping 625%.

    Yes, justice has to be seen to be done, but again why this case when there are plenty of others where there are actual victims? Is the commission just after a high profile scalp to look good?

    You can see why I didn’t follow my father, grandfather and uncle into the legal profession!

    This entry was posted on Sunday, November 21st, 2010 at 11:42 am and is filed under KiwiSaver. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

  15. #45
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    Quote Originally Posted by invessi View Post
    Minimoke, I have to say it is regretable that PH has been targeted, there are others far more worthy of prosecution in my view. I am inclined to agree with Phil Macalisters blog this morning on Good returns (below). As to the share price, I don't see that changing much until we get a good news story and they start paying dividends again!
    I don't know that he has been targeted - where he is today is where he ought to be. In the Kiwisaver arena there is no one more deserving of charges being laid against them than PH. He's the first to be found out for doing dodgy things so it is only right that his actions be judged by the judiciary to determine if those actions are legally acceptable. Other KiwiSaver providers will be watching closely.

    Macalister also has the advantage of hindsight - sure there were no victims. But that was only because he was caught out in time. Sure there are others more deserving - and Sec Comm seems to have its work cut out at them moment - there is no shortage of potential crims who are no doubt in their sights. One of the biggest fish would of course be Alan Hubbard who did the same thing as Huljich - and look where his investors have ended up now. If it wasn't for the Govt Guarantee they would be right up **** creek.

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