Hello again, I forgot another important possibility in that while everyone views rising interest rates as bad news, I feel there may be some good news for CIY for the reasons I mentioned in my previous post as well as the fact that rising interest rates will see an increase in investment inflow and Funds under Management will increase as investors are attracted by higher returns for their SMSF's and term deposits.
Rather than a decrease in monthly inflow from $30Ml to $25Ml as flagged in the Tolhurst review we could actually see the opposite as investors are drawn in by the higher interest rates on offer and CIY are possibly more agile than the banks in this respect and could well benefit.
If you remember back when homeloan rates were 17-18%, you could easily earn 14-16% on any funds invested so it is not all bad news in that respect. In that same era, I dare say CIY (hypothetically) could have offered investment rates of 18% and had retirees and SMSF trustees queued up to invest their money while lending it out at 20-21%.
Also as time goes on and projects get larger and more expensive, the amounts borrowed also need to increase accordingly, and therefore so does CIY's returns from the larger loans.
Well let's hope anyway!
CIY Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
