National Mutual, huge investor, looks abroad

Press, 3 February 1987, Page 21

National Mutual, huge investor, looks abroad

By P

NEILL BIRSS

National Mutual, which has just completed a boom year in the sharemarket, expects to ride out the price slide better than most. It has been buying overseas shares for some months, and this will be a cushion.

Last year, the insurance group’s holding in shares rose from $425M to SBOOM, and SI6OM of the increase was overseas.

The New Zealand branch of the National Mutual Life Association of Australasia, Ltd, one of the top two insurance companies in New Zealand, is also a force in the country’s sharemarket. It has investment income of up to $6 million a week to place. That it is prepared to accept the risks of dealing in overseas currencies to spread its assets from New Zealand is of significance to this country’s market.

Mr Barry Lindsay, investment manager of National Mutual, said after a press briefing in Wellington yesterday that overseas investment by the group rose from SI9M the previous year. Shares had been bought in Japan, West Germany, the United States, Hong Kong, Britain, and Australia.

The strong overseas portfolio did not mean that National Mutual was abandoning the New Zealand market, Mr Lindsay said.

The New Zealand portfolio includes most of the blue-chip shares, but a surprise may be $1.79M in Robt Jones Investments. “We have select investments in certain shares; we are not an index player,” Mr Lindsay said.

The market value of National Mutual’s New Zealand share portfolio rose 90 per cent from $425M to SBO9M during the 1986 financial year. This included net new investments during the year of more than S3OM. The portfolio was close to the performance of the Barclay’s industrial index. But it will almost certainly mean it is outperforming the index during the present slide. Mr Lindsay believes the New Zealand market may fall a little further, and is also wary of the Australian industrials because of the economy in the country.

However, he believes some Australian mining shares are good buying. In mining shares, investors could benefit as commodity prices rose, Mr Lindsay said. Australian mining shares were cheaper than American or Canadian mining shares.

Australian currency movements, and improvements in the Australian

mining industry, also made the shares attractive.

The company uses large overseas brokers and investment newsletters. It is in touch with the brokers by telephone every day. Some of the larger holdings in National Mutual’s New Zealand holdings are: Goodman Fielder, $109.2M; Carter Holt (including options), $224M; Fletcher Challenge, SIO2M; Brierley Investments, $72.4M; NZ Forest Products, $50.2M; Crown, S29M; Chase, $19.6M; Winstone, $12.7M; Lion,

$10.6M; L. D. Nathan, $9.2M.

National Mutual has about S6OOM invested in 192 properties, with many in mid-town Auckland and mid-town Wellington. The property portfolio increased during the year from S49OM to S6BOM. About 60 per cent of the investments is in office buildings, 19 per ■cent in retail developments, and the rest in car-park buildings and industrial properties. Loans on mortgage at September 30, 1986, were down in all classifications on a year earlier — housing, farm and commercial. Housing mortgages were down from $149.4M to 5143.3 M.

Some of the overseas shares in National Mutual’s portfolio are: • Australia: ANZ Banking Group, $20.19M worth; CRA, Ltd, $6.42M; CSR, 51.54 M; Industrial Equity, Ltd, $8.02M; James Hardie Industries, Ltd, S4.BM; Kern Corporation, $1.79; MIM Holdings, $2.55M; North Broken Hill, SL43M; Peko Oil, $1.87M; Westpac, SLS6M. • Japan: $5.4M.

• Industrial Equity (Pacific), $10.35M; Impala Pacific, SI.BBM.

• Britain: General Accident, Fire and Life, $2.19M; Grand Metropolitan, $1.83M; Rio Tinto-Zinc, $2.75M; Tozer Kemsley, $8.05M. • United States: Conagra, $1.44M; IBM, $1.37M; Kellogg, 51.19 M; Kimberley Clark Corp, $1.37M. • West Germany: Siemens, $1.35M.