Weekly Wrap: Settle down for the drama

In a week where the Dow Jones drops almost 800 points one day and then bounces up 500 the next, most news was tinged with hysteria. While the NZ market was relatively subdued by comparison, it remained a rough ride.

The vote yesterday by the US Senate to pass the much-reviled Paulson ‘rescue package’ has calmed investor nerves for the time-being but its passage through the US House of Representatives – expected some time this Friday US time – will be eagerly watched.

Back in NZ this week, the strain of a year-long bear market showed up in two of the Crown’s biggest investment pools – the New Zealand Superannuation Fund and the Government Superannuation Fund – both of which reported heavy losses for the 12 months to the end of June.

The NZ Super Fund dropped almost 5% over the period – or a decrease in value of over $800m – while the GSF slumped by more than $260m.