Investor Newsletter #4 - December 2012

Welcome to our December 2012 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.

2012 in Summary

This year has been a composite one for us. On one side we have seen an increased level of investors depositing with us. This is good. Investors are aware that the surviving finance companies now operate under a much tougher regulatory regime.  This is a positive feature. Deposit rates have fallen this year, showing that there are more funds to invest and that depositors are searching for yield, rather than leaving funds in the banking system, earning next to nothing. On the flip side, the demand for loans is only average. This is a reflection of current economic conditions and with us maintaining our high lending standards. This is sensible. We are continuing to look at more ways of sourcing new business.

2013 Crystal Ball

While it is always hard to predict the future, being in the finance sector allows us to spot certain economic trends.  We see things continuing in pretty much the same way as they did in 2012. The low interest regime will continue throughout 2013. This is not only apparent in the mortgage market, but also evident in the corporate and Government sectors, with bond investors accepting lower yields. Unemployment will remain at current levels or may get a little worse, until we start to see some real growth occurring. Our dollar will remain at the current levels for some time, making it difficult for our exporters.  We expect further Government cost cutting and a reduction in state employee numbers. Next year will be the only year the Government can do this, as in the following year there will be an election. Overseas, we will be focusing again on the debt issues in Europe. Next year is likely to be a repeat of 2012.

Next Year for Us
Our lending will remain unchanged. We will continue focusing on bridging and short term lending propositions involving residential property. We are lucky that this is the largest property sector in the country, including houses, flats, apartments, baches and lifestyle blocks. We believe that lending in this sector is the safest, but it is not straight forward.  Some locations are declining in popularity and are difficult to sell, and other issues do arise such as the leaky building problems. Next year we are planning to grow more, but it will be in a controlled manner, sticking to our core business.

Next Interest Payment
Our next quarterly interest payment will be made on the evening of Friday 28 December  2012. Direct credits will be processed that evening, with cheques (if applicable) and paperwork being forwarded during the week.

As this is our last newsletter for the 2012, we wish everyone a Merry Christmas and a happy New Year. We appreciated your support this year and look forward to your continued support in 2013.

If you have any questions about your investment please do not hesitate to contact William Cairns on 09 526 7801 or by email to wcairns@general.co.nz.  Our website is www.general.co.nz.    

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

In accordance with the Financial Advisers Act 2008 (“the Act”) this Newsletter is “Class Advice” and any advice or recommendations contained in it or on the General Finance website is not “Personalised Advice” as defined by the Act. This means the Newsletter does not take into account an investor’s particular financial position, financial needs, financial goals, risk profile or asset allocation. Investor’s who require “Personalised Advice” should contact an Authorised Financial Adviser (AFA).