(6 December 2011 – New Zealand) The appeal of New Zealand for overseas investors appears to be its perceived economic stability, as well the piles of cash sloshing around in bank vaults.The latest figures from the Reserve Bank of New Zealand (RBNZ) show there is NZ$101.3 billion (A$80 billion) held in savings and term deposits at locally registered banks as of October.
That is the highest local savings level since the bank started keeping records on the measure in 2004, and comes as households have paid down debt and focused on savings.
This situation is proving lucrative for bond investors and those issuing corporate bonds.
Since the beginning of August there have been 11 corporate bond issues, with two expected to be completed before the end of the year, versus four in the first six months of the year, according to the NZX, which operates the New Zealand debt market.
The last three corporate issues on the NZX offered yields of between 5.5 percent and 8 percent on six-year bonds. The top equivalent interest rate being offered on a five-year term deposit among the country’s main banks is 5.5 percent, according to the Interest.co.nz website.