Uplift in Confidence Pre Christmas
My last newsletter, New Government – New Opportunities, written about a month ago, predicted a smooth transition from National to the Labour/NZ First coalition, and so far that has been the case.
Baby, you'll come knocking on my front door
Same
old line you used to use before
I
said, "Ya, well, what am I supposed to do"
I
didn't know what I was getting into
Stevie
Nicks & Chrissie Hynde – Stop
dragging my heart around
My last newsletter, New Government – New Opportunities, written
about a month ago, predicted a smooth transition from National to the Labour/NZ
First coalition, and so far that has been the case.
As anticipated there was a clear slowing in activity coming into the election
as we all wondered which way it would go. The stalemate results, while not
unexpected, did result in a further period of inactivity. But now the new
government is in place, any concerns as to the new Prime Minister’s ability to
lead (and for Winston Peters to stay in the background) seem to have been laid
to rest.
And on top of this summer has arrived.
Confidence
Remains Strong – Housing Market Settles
From what we are seeing in TBK Capital and Tabak Business Sales, with the
elections over and no surprises, there is now an uplift in confidence in the
economy which goes beyond the pre-Christmas rush.
As always is the case here in New Zealand, the housing market is a strong
indicator of confidence in the economy. This has had huge increases in volumes
and prices over the last few years, and I must say there has been some
nervousness amongst those of us who have seen this before, and the awful consequences
of a violent correction. In fact some concerns about the market had started to
appear, as shown in this article in the Herald last April.
Fortunately we’re now starting to see some sense prevailing, with this week’s Herald article reporting “Auckland's
property market is losing its golden sheen. Almost half of all suburbs dropped
in price in the three months to September.” New figures out show 80
of 168 suburbs in the Auckland region saw values drop in the third quarter.
I guess some saw the flattening of the market coming. Tony Alexander’s recent Weekly Overview – No New Housing Surge -
discusses the New Zealand Reserve Bank’s rather surprising move to ease the
loan to value ratio credit controls introduced 4 years ago. His view is the “fear of
missing out” on entry price and has reduced, and most real estate
agents I know seem to agree.
The recent release of the latest CVs of houses has given some clarity to house
values, and as most people’s main asset is their house, validation of their
core underlying wealth. This, together with the relatively smooth transition of
the change in government, has led to a confident entry into Christmas and the
New Year.
Investment
Opportunities
This confidence will enable people to enlarge and diversify their asset holding
outside their residence and create substantial returns. At TBK Capital we offer
participation in property and business for those who qualify as a “Wholesale”
investor. See Projects on our website. Here are a few.
Secured
Fixed Interest Return
If you’re looking for an immediate return on your money Moola, New Zealand's market leader in digital
lending, is offering investors up to a 12 % p.a. return on their
investment. Moola provides small online loans to a large and diversified
number of individual borrowers within 60 minutes of approval. Repayments are
secured through the borrower’s agreement to have them deducted on the day they
get paid. It is now also offering its customers longer fixed term loans of up
to $5,000. Investors’ loans to this digital lender are secured by a first
ranking GSA over the company and are repaid in terms of 1, 2 or 3
years. See our previous newsletter here.
Online
Supermarket
2UGrocer is issuing new ordinary shares in its
business to provide the capital for development of distribution centres in
Australia and New Zealand, to leverage off its 80,000+ customers. They’re now
in negotiations to take ownership of a craft brewer. This a revolutionary
business that enables its customers to complete a one stop grocery shop online.
And it provides a convenience level faster than driving to and from a bricks
and mortar competitor. The advantages of higher quality produce, lower prices
and more convenience, come from their lean supply chain. Leveraging smart
processes and proven technology allows the business to achieve above industry
returns. See previous newsletter here.
Marine
Exports
Air Hull is offering new ordinary shares in its inflatable boat building
business. The advantages Air Hull boats have for all operators are Quick
Deployment and Portability. Their Australian distributor is the largest
distributor for Mercury Marine there and has ordered 10 boats. Surf Lifesaving
NZ has been showing the production version of the boat to surf clubs throughout
the country. These buyers provide the platform for Air Hull to target
their key international markets which include Commercial Operators like Water
Transport, Light Military for Search and Rescue, Customs and Boarder Control,
Ships and Liners for Water Safety, Luxury Tenders and the Recreation Markets.
See our previous newsletter here.
Halal
Meat Exports
MeatCo is raising working capital to meet
increasing demand from buyers by way of the issue of Convertible Notes. These
have an interest rate of 10% p.a. and convert to ordinary shares in the
business in just over 2 years’ time. MeatCo supplies New Zealand sourced and
packaged high quality meats to halal distributors and export markets offshore.
Since it commenced business in 2016 is has already become one of the leading
suppliers to the Middle East and South East Asia. The issuer is seeking larger
investors for whom security for the Notes could be provided. See our previous
newsletter here.
Working
Capital to meet Demand
Bishop Warden is issuing new ordinary shares
to raise more working capital to meet the demand for their services from
businesses wanting to recover unpaid debts. The creditor assigns the debt to
Bishop Warden which initiates legal proceedings. In less than a year from
starting they have signed up over $3 million in debt and are restricted only by
working capital for more. They are predicting annual income of over $10 million
in 5 years’ time. See our previous newsletter here.
Want
to Know More?
I'm always happy to hear from you if you'd like to comment of matters raised in
our newsletter - or of course if you're looking to raise debt or equity or
would like to find out about any of our current offers.
The best way to keep in contact is to reply to this email or give me a call on
+64 21 902 901 or +64 9 307 3257.
.............................................................................................................................................................................................................
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