01 March 2022

Investor News Wrap: February 2022

News that Kiwi investors should know, including new financial regulations, fraud and scams, research, reports and offshore developments.

Alleged insider trading of Pushpay shares

The FMA has filed proceedings against two people for alleged insider trading in relation to the sale of shares in Pushpay Holdings Limited.

One faces a criminal charge, filed in the Auckland District Court, and both face civil proceedings, filed in the Auckland High Court.

The FMA is alleging one used their prior knowledge of the 2018 resignation of Pushpay’s co-founder and then-director Eliot Crowther to advise or encourage another person to trade in the lead up to the market announcement; while the other was involved in the conduct.

Neither Mr Crowther nor Pushpay are party to these proceedings, and Pushpay has cooperated with the FMA and has not been the subject of that investigation.

Read the FMA media release

See the FMA webpage about insider trading

Responsible investing’s rapid growth

Investment funds labelled “responsible” now account for 18% of the total NZ retail investing market, with around $17 billion of funds under management

That’s according to trans-Tasman research and analytics firm Plan For Life, which said responsible funds have seen “significant growth” here, up 27.6% year-on-year.

Plan For Life said across Australia and New Zealand, responsible funds topped AU$100 billion for the first time in the September 2021 quarter, with annual growth of 37.2%.

According to the 2021 KiwiSaver Annual Report, 31 of 37 KiwiSaver schemes stated in their PDS that they consider aspects of “responsible”, “ethical” or ESG investment in their decision-making.

See the Plan for Life media release 

Reserve Bank to begin bond selloff

New Zealand’s central bank is to start selling off the NZ Government Bonds it began buying when COVID-19 first hit, and says that “may put some upward pressure on longer-term interest rates.”

The Reserve Bank made the announcement in its February 2022 Monetary Policy Statement, when it also lifted the official cash rate to 1% - the highest wholesale rates have been since the pandemic began.

The bank’s Monetary Policy Committee said bond sales would happen despite some concerns that "some longer-term interest rates may change as the market analyses the net effect on bond supply.”

It said its bond holdings will be “gradually reduced to minimise unnecessary volatility in interest rates”, at a rate of “$5 billion per fiscal year, commencing in July 2022” assuming this remains consistent with monetary policy objectives, and subject to market conditions.

See the Reserve Bank’s February 23 media release

OECD suggests lifting NZ Super age

The Organisation for Economic Co-operation and Development has again suggested a lift in the age Kiwis can get an old-age pension, so growth is “more sustainable in the wake of the COVID-19 crisis".

In its latest Economic Survey of New Zealand, the OECD said rising government debt due to our COVID-19 response and an ageing population meant “measures are needed to put public finances on a sustainable medium-term path, including linking the pension eligibility age to life expectancy."

It suggested providing the pension “on a means-tested basis from age 65 until [a] life expectancy-linked eligibility age, at which point the pension would no longer be means tested.”

The report estimates that lifting the age to 67 by 2029, then increasing it by six months per annum after, would save 0.7% of GDP per year once fully implemented, currently equivalent to $2.24 billion.

Read the overview of the OECD’s 2022 Economic Survey of New Zealand