News } TBK Capital

Elections, Borrowing and Investing

On the 30th October 2017, following the Jacinda Ardern’s election as Prime Minister, I published a newsletter entitled New Government - New Opportunities. In this I said “there appears to be an acceptance from traditional National followers to the change” [in Government].

There must be some way out of here
Said the joker to the thief
There’s too much confusion
I can’t get no relief

Bob Dylan – All along the watchtower

On the 30th October 2017, following the Jacinda Ardern’s election as Prime Minister, I published a newsletter entitled New Government - New Opportunities. In this I said “there appears to be an acceptance from traditional National followers to the change” [in Government].

The Newsletter went on to say that at that time, according to Bloomberg, the “New Zealand’s economy grew at the fastest pace in two years in the second quarter [of the financial year], prompting markets to pare bets on an interest-rate cut. The currency rose to a three-week high.”

But now, as the election draws near, in my view - while Jacinda Ardern steals the limelight in a personal way and has done an excellent job - I’ve never really been sure who’s doing what behind her in Government, or what the Government’s actually doing. And as we come into the next Election, I’m not sure I’m any the wiser. Even Winston Peters is quiet. 

And of course, with the recent debacle of its leadership changes, National’s placing itself in an even worse position than before the last election.

Yes it’s going to be an interesting few weeks coming up.


This has been both a blessing and a problem for New Zealand, with so far the former far outweighing the latter.  The Government acted decisively and fast has done an excellent job. The pain of the lockdown, in the most general sense, has been well worth it.

Comparatively speaking Australia was too slow off the block, opened to early, or did not take the degree of lockdown we did – or all of these. The Virus is now rising there and being managed as a Health Emergency. This second lockdown in Melbourne is being seen as having a Catastrophic Cost.  

Of course all this is very unfortunate as it hurts both our economies. There was a time I saw the lack of the virus in both countries being another step towards a true Australasia (although I can’t see the politicians agreeing to that). The new Travel Bubble for us here now seems to be the Cook Islands. But I’m not sure how many reciprocal visits to Queenstown to enjoy the skiing, are going to result from that.

Whatever the obvious immediate effects this is having to us, both there are going to be longer term shocks to the both our economies, not the least being rising unemployment.  And it will include good employees. The numbers out of Air New Zealand for example must be large.

Then there’s tourism. The latest Monthly Economic Review reports “Tourism spending, including domestic tourism spending, fell by 90 percent between April 2019 and April 2020 according to the Ministry of Business, Innovation and Employment (MBIE).  The Otago region was the hardest hit, with tourism spending falling by 96 percent.”

One very encouraging development in this respect is the importance of offshore investors in New Zealand.  A recent example we know well is the interest received to purchase a luxury home being built in Nelson - the subject of one of our investment Offers  

Borrowing money

Over many years now I’ve been sending newsletters summarising the loan market. The last detailed one was over 2 years ago and you can see it here. While interest rates – and even the variety of lenders – in it may be a little out of date, it does show the cross section of loans available.

As it happens a great advantage of the current economic situation is there is now plenty of loan money around and it’s a great time to borrow. Examples include 2 year bank home loans at 2.69%, and floating loans at 4.5%.  And even non-bank lenders are offering bridging loans as low as 6.5%, and 5 year non-bank personal loans at 8.95%. By the way, I can remember when the first mortgage on my first house was 14%.

The other difference from those days is the increase in the number and variety of non-bank lenders. While some of the “finance company” lenders are restricted to residential lending, more recently we’re finding a far more variety of loans that suit businesses.

Recent examples include businesses that need to finance expansion but have “run out of equity in the owner’s house” and are seeking other forms of loans. And as our sister company is Tabak Business Sales, we are very familiar with these other forms of financing.


I’ve written numerous Newsletters on investing and the opportunities we provide to qualified investors.

The latest one you can see here, and we’re just about to send out an update to all the people who have shown interest the Nelson luxury home development. So if this is of interest let me know and I’ll send you a copy of the Information Memorandum.

In any event I’m always happy to hear from you and if you’d like to comment on the matters raised in our newsletters. Or of course if you’re looking to raise debt or equity for business or property, or would like to invest in either.

The best way to keep in contact is by phone +64 21 902 901, or simply reply to this email.

Any reference above to investment is not an offer of financial products that requires disclosure under the Financial Markets Conduct Act 2013 (Act) and is available only to wholesale investors as defined by that Act. It is intended for distribution only to selected people to whom, under the relevant laws, it can be lawfully distributed. It cannot be distributed in any other jurisdiction, or to any other people. It is not an offer or solicitations in any jurisdiction in which such offers or solicitations are not authorised, or in which the person making such offers or solicitations are not qualified to do so, or to any person to whom it is unlawful to make such offers or solicitations. Any representation to the contrary would be unlawful. No action has been taken by any person that would permit a public offering in any jurisdiction where action for that purpose would be required.


John Paine B.Sc., Dip BIA
TBK Capital Limited
Level 10, 120 Albert Street
Auckland 1010, New Zealand
Phone +64 9 307 3257
Mobile +64 21 902 901

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