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Feature Article
Small Cap Stocks: High returns come with higher risk

In recent weeks, there has been a lot of debate on investment in small cap stocks and corresponding illiquidity. There are a lot of fund managers specialising in small cap stocks both in New Zealand and international markets. Small cap stocks can boost returns massively but these come at a risk. This article aims to inform readers about potential risks of investing in small cap stocks.

As has been noted, small cap stocks usually face irregular trading and hence pose liquidity risk. Liquidity risk can be defined as the risk arising from lack of marketability; that there may ...

The Week That Was

The market had a solid week aided by a strong offshore lead. SkyCity (SKC) performed well after management reported solid growth at the Auckland property. Air NZ (AIR) had a good week’s performance with the fear of Ebola subsiding somewhat and oil prices continuing to fall. The National carrier released statistics of operating performance which looked relatively positive with year-to-date short haul yields up 1.8% and PAX for September across the group up 2.6%. With recent aircraft arrivals and schedule changes, domestic capacity was up 4% and Tasman +3%. Sky TV (SKT) was positive on Friday following the announcement that it had secured conditional rights to the SANZAR rugby for a further five years from mid-2016 and AGM commentary in-line with expectations. While it is likely SKT paid more for the rights, it remained a must win situation for management against the increasing presence of internet distributed pay TV business models.

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