Panic? Borrowing and investing will continue!
As 2020 financial year draws to a close, I’ve had the time to reflect on the recent coronavirus scare – which appears to have introduced some panic on the financial markets. This is a moving matter but at the time of writing this newsletter
As 2020
financial year draws to a close, I’ve had the time to reflect on the
recent coronavirus scare – which appears to have introduced some panic
on the financial markets. This is a moving matter but at the time of
writing this newsletter here’s what the Herald had to say.
First I guess the good news is for the vast majority of people who
contract this disease it is not deadly. And the latest research shows
that children and young people are at an especially low risk of health
complications. Actually it reminds me about the panic over flu virus
some years ago which if I remember correctly, 99% survived and of the 1%
that didn’t 85% were over 75.
Second let’s not forget the universal practice by papers that
sensationalism sells, so coronavirus continues to hit the headlines. And
on TV the other day was that really real all those people fighting over
rolls of toilet paper in the supermarkets here in New Zealand? By the
way, there is a positive sign about this as it’s a Dunedin factory
working overtime to produce more.
Third, those of us who remember the 1987 sharemarket crash and the causes, some of which can be seen here,
can recall borrowing money to invest in shares was common at the time.
This practice exacerbated both the impact on people’s finances and the
fall of the market as lenders called in their loans. Then there was the REIT scandal of some years ago where properties were bundled into negotiable securities at inflated prices.
So it wasn’t surprising to see s0me irrational behaviour in the sharemarket in the U.S. driven by the drop in the Oil price. Or that airlines were seeing cuts in domestic and international services. However now at the time of writing this I can already see some sense appearing.
Now of course, for obvious reasons, the share price of a listed company
is an important factor when it wished to raise money. But an SME’s
ability to raise equity and debt is specifically based on its balance
sheet, and its previous and projected financial performance which show
its ability to service debt and pay dividends.
It’s always difficult to predict how the events above will affect the
ability for Businesses to raise debt or equity but we don’t see any
change. Clearly this is a function of their past and predicted
profitability and cash flow for the business, and of course their
current balance sheet.
I’ve already spoken to a number of lenders who have said these
happenings have no bearing on changing their lending criteria. So if
you’re looking for money call us.
Investment Opportunities
If you’re a subscriber to our Opportunities newsletters you’ll have seen those we have available. But here’s an update on few of them. For information about other Offers see our website.
Reply to this email or call me on 021 902 901 for further information.
Amberley Retirement Village
See the offer here.
One Unit is anticipated to return $164,000 tax free during the
development and on completion. Once the village is completed that share
is budgeted to return an annual income of $70,000 per year from the
relicensing of the Units. This is partly tax sheltered by the
depreciation on the village. And I can’t think of any investment much
more recession proof than retirement villages now having to cope with the increased demand as baby boomers retire.
Not surprisingly with a predicted 64% return plus tax incentives this is
now fully subscribed except for only 3 of the $100,000 Units. By the
way I’ve got more of these retirement villages to come, so happy to take
expressions of interest from potential investors.
DryNZ
See overview of this offer here.
Recent new packaging designs means millions of Chinese may soon wake up
to a new health and well-being sachet - ‘Pure NZ drinking fruit’.
DryNZ has developed a wellness product using fresh fruit from their
heartland growers. The fruit has been freshly dried to perfection and
milled into a fine powder then blended with NZ manuka honey powder.
There are five flavours – blackcurrant, peach, kiwifruit, apple and
lemon. This natural gluten and preservative free product can be mixed
with hot or cold water, used as a topping for breakfast foods, congee,
as well as in smoothies, fruit teas and snack foods.
As a result of their research, DryNZ believes China is poised for a new
natural health product like this that fits with their new global
initiative ‘Healthy China 2030’.
Nelson Luxury Home Development - Projected 40% Return
With the current uncertainty in the Northern Hemisphere Markets due to
Covid-19 and the recent fall in the Financial Markets, there is even
more reason for Offshore buyers to secure their place in the Sun in New
Zealand.
Since our last newsletter the Marketing Plan has been finalized and the
Concept Plans -including the addition of a Media Room - completed and
the Detailed Drawings are now underway.
Interested parties are encouraged to speak to the developer, so reply to
this email or call me for his contact details. The investment has a
projected 40% return to Investors over 2 years, refer the Offer here.
Want to Know More?
If you’d like to know more about any project in this Newsletter, email or give me a call on +64 21 902 901.
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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.
Cheers
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
Email john.paine@tbkcapital.co.nz