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Investor Newsletter - March 2014

Welcome to our March 2014 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. 

Interest Rates
On 13 March 2014 the Reserve Bank increased the official cash rate from 2.50% to 2.75%. This is good for those with cash deposits at a bank or with finance companies (such as ourselves). It is not good for those with mortgages, as floating rate mortgages will increase by at least 0.25%.  We believe this rate rise is premature. Housing markets are only strong in Auckland andChristchurch. In the rest of the country they are reasonably flat.  With our interest rates the highest in the OECD, and with a growing economy the OCR increase will predictably increase our exchange rate – this is bad for our exporters. Is our economy as strong as some say? Our unemployment figures suggest otherwise - we still have 6% of our work force unemployed and in some provincial areas this is around 10%. We believe the Reserve Bank has increased its rates too soon and should have waited until the recovery is fully underway and unemployment has dropped further. 

Property Prices Over the Past Year 
According to Quotable Value, property values from February 2012 to February this year have increased by 9.3% nationwide.  They are 13.1% above the previous peak in late 2007. However, these are averages, and there are significant regional differences. Two markets in general have seen strong growth - Auckland at 14% and Christchurch at 11%.  Hamilton’s price growth is 5.4% and New Plymouth is 5.7%. Most other provincial areas and Wellington have experienced little growth - Wellington at 2.9%, Napier at 1.0% and Dunedin at 1.7%. Growth rates are likely to be less over the next twelve months due to higher interest rates and the loan to value restrictions.

First Quarter’s Progress
The start of this year has been busier than the corresponding period last year.  We are receiving a steady stream of mortgage applications. We are tending to concentrate more on the larger cities and towns.  The reason for this is the level of economic activity and housing turnover in these places. We are continuing with our current strict lending criteria of only considering residential securities with loan to values ratio of up to 70%.

Next Interest Payment
Our next quarterly interest payment will be made on the evening of Monday 31 March 2014. Direct credits will be processed 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 William Cairns on 09 526 7801 or by email to Our website is

If you want to invest more funds, you can obtain an investment statement and application form from our securities registrar. Their number is 0800 500 602.


Your continued support is noted and appreciated.