Gareth Vaughan, sitting in for Bernard Hickey, details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that the Serious Fraud Office is investigating transactions between would-be Crafar Farms buyers Natural Dairy Holdings and the UBNZ group.
SFO CEO Adam Feeley said the transactions in question were the proposed sale and purchase of the Crafar Farms. The 16 farms were tipped into receivership last October owing about NZ$216 million to Westpac, Rabobank and PGG Wrightson Finance. Natural Dairy and UBNZ have agreed to buy the farms for about NZ$213 million although the deal is contingent on Overseas Investment Office approval and receiver KordaMentha can accept a better offer.
The OIO says until the SFO investigation is concluded, it can’t provide a recommendation to the Government on whether the Natural Dairy-UBNZ offer should be approved.
In the United States Reuters reports that mortgage lenders Fannie Mae and Freddie Mac may need up to another US$215 billion of capital from the Treasury through until 2013 to offset losses and maintain a positive net worth. The US Federal Housing Finance Agency estimates Fannie and Freddie, which were seized by the Government in late 2008, will likely need between US$221 billion and US$363 billion through to 2013. The projected amounts vary depending on changes in home prices. As of June 30 they had drawn down US$148 billion.
Meanwhile in Australia, the Treasury is preparing for a public assault on any bank that seeks to hike its mortgage rates above a potential Reserve Bank of Australia rate rise on November 2, Melbourne Cup Day. Jim Murphy, a Treasury executive director, told a senate hearing the Treasury was collecting information on each bank's cost of funds and would use it to hold them to account.
And in an interview with the Australian Financial Review, Australian Competition and Consumer Commission chairman Graeme Samuel has called for new laws to deal with potential collusion on interest rate changes.
"We're starting to get concerned about price signalling," Samuel told the AFR. "At the moment the commission doesn't have the power to deal with it."
At the same time the chairman of Australia’s Future Fund has been in talks with the Julia Gillard government about opening up Australia Post's branch network for financial services in a Kiwibank style move.
The Australian cash rate is currently 4.50% with expectations it might be lifted to 4.75% on November 2.