Weekly Wrap: Credit crunch continues

The on-going theme of the week has once again been the worsening crisis in the credit markets and the impact of the hundreds of millions of dollars invested into this sector.

ING's funds, which are some of the biggest in the market, had their unit prices written down during the week. Macquarie's Fortress Notes sold some assets to reduce debt. Two of the other listed funds also announced events. The PINs units had their price set at around the 92c market and S&P put Credit Sails on a negative credit watch.

I suspect there are some very nervous investors and advisers out there at the moment. Especially when you think about how much money has been lost in the unit price write-downs. There is more than $1 billion in this sector, and write downs could possibly be averaging 10% - that's $100 million gone. But as some point out it's only a paper-loss, and the issue is really for short-term investors, as opposed to those in these products for the long term.

The out-of-left field story was Westpac's announcement that it planned to do a partial float of its wealth management business, BT Funds. As our story shows it is still uncertain whether the New Zealand part of the business will be included in the listing.