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Investor Newsletter - March 2008

Welcome to our thirteenth General Finance quarterly newsletter. We appreciate your support. The purpose of this newsletter is to keep you informed about the company and various financial matters that may interest you. This newsletter, like our last one, will be more technical and we will be discussing various factors that make us able to handle the current economic issues facing the finance company sector.

Finance Company Sector
The finance company sector continues to receive, what we believe is unduly bad press. This unfairly punishes the good companies within this sector. In the wider context (which we believe is important to consider) the issues that are facing finance companies are spreading to other sectors. We have seen world share markets fall and a number of shares in our market have fallen by 20 - 50%. In Australia, the banks, such as NAB and CBA, have suffered share price losses of up to a third of their value, from their highs of last year. What were considered safe and secure funds (the ING Diversified Yield Fund and the ING Regular Income Fund) has suspended redemptions, which we consider is appalling. The high profile property syndicator, Blue Chip, has all but gone, affecting hundreds of investors. The New Zealand Superannuation Fund which should have a conservative asset allocation, has seen its value drop, and its chief investment officer has been made redundant. We do get annoyed at many negative comments that are made by unqualified commentators who seem to be only targeting the finance company sector. For our investors, it is very much business as usual, we are lending and receiving deposits (although clearly at a lower rate than last year).  In many ways the quality of our lending applications is improving, due to less competition in our sector. If you require any further information about us or your investment, we would welcome your call.

Experience in Lending
One of the strengths of General Finance Limited is that the directors and staff are lending on residential mortgages on a daily basis.  General Finance Limited is a specialist residential lender providing short term bridging loans and other short term accommodations. Its parent, Cairns Lockie Limited, is a prime rate lender offering residential mortgages throughout New Zealand. As a result we have considerable experience in lending in this sector and in managing the residential mortgages that we originate.

Residential Property Market
The slowing of the housing market is now occurring, according to the Real Estate Institute of New Zealand. The median price of residential dwellings, New Zealand wide, now stands at $337,500, up just 0.74% from February 2007 at $335,000. The Auckland market has actually seen a small price drop - the median price last month was $427,000 compared with $430,000, a decrease of 0.70% on the previous year. The big change over the past year is the length of time it is taking to sell a property - this has increased on a year ago from 32 days to 50 days. On top of this, the number of dwellings being sold has dropped to 6,356 in February 2008 compared with 9,357 the year before. This is well off the peak of 10,145 in February 2005.

Next Interest Payment
Our next quarterly interest payment will be made on the 31 March 2008. Direct credits will go in that evening, with cheques (if applicable) and paperwork being forwarded during the week.
If you have any questions about your investment please do not hesitate to contact me on 09 526 7801 or by email to  Our website is a

If you want to invest more funds or obtain statements and the like, our securities registrar's number is 0800 500 602.

Your continued support is appreciated.