US regulators have responded strongly to the ‘Reddit rally’ that temporarily boosted GameStop’s stock price by over 300 percent in late-January.
Operators of the online trading platforms that facilitated the trades were ordered to testify before the House Financial Services Committee, in what its chairwoman said would be "the first in a series of hearings… to examine the recent market volatility”.
The US Securities and Exchange Commission (SEC) had earlier said it and other regulators are investigating the price spike caused by social media chatter and investor activism.
Amid public debate over the ethics of NZ companies’ offshore activities, the FMA has published a new webpage on ethical investing. This followed guidance to the financial services industry about 'greenwashing' and reporting their environmental and social impacts.
Meanwhile, a new report by research firm Morningstar said US investment in managed funds that follow ‘environmental, social and governance’ (ESG) principles had more than doubled in 2020, to $US51 billion of new investment — the fifth consecutive annual record.
Credit ratings agency Standard & Poor’s (S&P) lifted New Zealand’s foreign currency rating from AA to AA+ and its local currency rating from AA to AAA.
Credit ratings give investors an indication of the creditworthiness of an entity in which they are considering investing, and triple-A indicates the strongest level, the NZ Treasury says.
The Reserve Bank is now required to consider the impact on housing when making monetary and financial policy decisions, Finance Minister Grant Robertson announced on 25 February. “The Bank will have to take into account the Government’s objective to support more sustainable house prices, including by dampening investor demand for existing housing stock to help improve affordability for first-home buyers,” Mr Robertson said.
This follows the Reserve Bank decision on 9 February that loan-to-value ratio (LVR) restrictions would be reinstated for property loans from 1 March, limiting how much banks can lend to investors and owner-occupiers with low deposits. For investors only, the LVR will be further tightened from 1 May.
Chinese New Zealanders have been urged to beware of investment scams in the current economic climate and to report any to the FMA. The FMA is concerned the community may be under-reporting investment scams compared to the wider population.
During the Lunar New Year celebrations, the FMA launched a Chinese-language page to help Chinese New Zealanders know how to spot a scam, and what to do if they encounter one.