A.M.P. gives explanation for lower investment

Press, Volume CXV, Issue 33783, 4 March 1975, Page 14

A.M.P. gives explanation for lower investment

(Aew Zealand Press Association—Copyright)

WELLINGTON

A fall in mortgage repayments was a major reason for a slight decrease in the total funds invested by the Australian Mutual Provident Society (A.M.P.) during 1974, compared with 1973, the New Zealand manager (Mr K. W. J. Deal) said yesterday.

In 1974, investments fell slm to s6sm.

“It is usual for an increasing amount of money to be available each year for investment,’’ said Mr Deal. “However, the tight liquidity of last year caused a considerable reduction in voluntary mortgage repayments. This meant A.M.P. had less funds to invest.”

Another effect of the tight liquidity situation was a considerable reduction in voluntary mortgage repayments, which also left less for A.M.P. to invest.”

The tight, liquidity situation had also brought a considerable increase in personal loans to policyholders on the security of their policies, Mr Deal said. This amount rose about $3.7m to $7.7m. The other main factor affecting A.M.P.’s investments during the year had been the large proportion of the funds required to meet the rapidlv rising costs of already committed property development. “There are a number of A.M.P. building projects under way in various parts of the country,” he said. “The i considerable increases in both labour and material costs has meant that these projects are now requiring a good deal more funds than was expected when they were first planned. This was the main reason why the investment in property rose by sBm to s22m in 1974.

Property investment, and the tight liquidity had meant a significant reduction in A.M.P.’s share investment, down from $5.3m in 1973 to $2. Im last year, Mr Deal said.

“At the same time, however, we were determined to support the house and farm mortgage markets to the best of our ability, and despite the restrictions, we were able to make available $9.2m in

house loans and $7.7r0 in farm loans,” he said. When these were added to the $7.7m in loans on policies, a total of $24.5m was made available to policyholders, compared with $24.8m the previous year.

In the other main investment categories, A.M.P. placed $7.5m in the public sector and sB'.om in commercial loans, he said.