NZSX50 - Good News!

[bull....]

first mth of the yr nearly over and nz is one of the worst performing markets for the mth. they say what was best one yr not necessary the best next yr

[hogie]

first mth of the yr nearly over and nz is one of the worst performing markets for the mth. they say what was best one yr not necessary the best next yr

You should honestly consider changing your alias to bear...

[bull....]

You should honestly consider changing your alias to bear...

i dont know how stating a fact is bearish , maybe i should have said nz participated in the rally and did well considering the competition.

[BlackPeter]

first mth of the yr nearly over and nz is one of the worst performing markets for the mth. they say what was best one yr not necessary the best next yr

Probably just means that NZX taking a breather while the losers of last year have a wee chance to come at least closer. What is the relevance of NZX underperforming in January?

[bull....]

back to all time highs very bullish gentailers and utilities leading the charge , not surprising in a low rate environment

[sb9]

back to all time highs very bullish gentailers and utilities leading the charge , not surprising in a low rate environment

Thanks largely to FED, who essentially indicated no further rates hikes for rest of this year.

[bull....]

Thanks largely to FED, who essentially indicated no further rates hikes for rest of this year.

also 2020 they decreased there forecast for rate rises. rbnz will drop int rates this yr and aus rb will as well. my fav is mel and gne. 8.4% on gne is out of this world when compared to deposit rates and i think it should be sustainable.

[Toulouse - Luzern]

NZX and ASX open strongly today.
I recall at this time of year, some say window dressing is possible into the close of the QTR.

[bull....]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12216816


The Reserve Bank has kept its official cash rate (OCR) on hold at 1.75 per cent, as expected, but said the next move is likely to be down.

as thought things slowing down, the gentailers look very attractive going forward , even more so later this yr when rates fall

[sb9]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12216816


The Reserve Bank has kept its official cash rate (OCR) on hold at 1.75 per cent, as expected, but said the next move is likely to be down.

as thought things slowing down, the gentailers look very attractive going forward , even more so later this yr when rates fall

If economic growth slows down further, that'll have far reaching impact on company's profitability and therefore affecting free cash flow too.

I would be careful buying at these elevated levels.

[bull....]

If economic growth slows down further, that'll have far reaching impact on company's profitability and therefore affecting free cash flow too.

I would be careful buying at these elevated levels.

the valuations becomes cheaper everytime rates go down as long as business conditions stay reasonable low growth probable, income becomes the priority for investors now

[stoploss]

If economic growth slows down further, that'll have far reaching impact on company's profitability and therefore affecting free cash flow too.

I would be careful buying at these elevated levels.

You think people are going to get home in the middle of winter and Not put the lights and heater on ?

[sb9]

You think people are going to get home in the middle of winter and Not put the lights and heater on ?

If people's income/disposable income affected through changes in their employment situation, they may well be forced to....

[stoploss]

If people's income/disposable income affected through changes in their employment situation, they may well be forced to....

Don't forget the winter top up for people on a benefit and pension :) Mel for $ 1.50 were one of the gifts of a lifetime.

[bull....]

Don't forget the winter top up for people on a benefit and pension :) Mel for $ 1.50 were one of the gifts of a lifetime.

hold on for much higher prices i guess

[Toulouse - Luzern]

NZX and ASX open strongly today. (21 March 2019)

I recall at this time of year, some say window dressing is possible into the close of the QTR.


From 9420 on 21 March 2019 to 9695 today, according to Yahoo, a 270 pips rise, so far...

[bull....]

anything with a sustainable dividend is being brought up , people see the low rates coming as a last chance to get income i reckon

[bull....]

well and truly broken out now of the consolidation. 9240? breather im still got 10k on the radar esp if my targets for the us happen

nearly there , markets love big round numbers. would be very bullish if we roar past

[winner69]

NZX50 be over 9,000 sometime this week

And then heading to 10,000

Cool eh

Said this 9 months ago

So 10,000 this week or maybe next week

Sooner than I thought

Cool

[Arbroath]

Given its a gross index I'll go out on a limb and say the index will go to 20,000 by 2030.

[Tomtom]

I got e-mailed a bizzare survey from the NZX today with a series of very leading questions about the tax working groups recommendations?

[Lewylewylewy]

Yeah, i got that. It's an odd easy to do a partition, if that's what it is.

I wish someone was able to get the govt to clarify why the behavior of buying stock privately needs corrected, and why we should be instead forced to invest via low yeilding kiwisaver monopolies... err i mean companies.

Perhaps a different thread, but does anyone have any news on cgt? I thought it was due to be announced on April fools, but ive not been able to find anything. I'll probably ring my accountant tomorrow.

[bull....]

I got e-mailed a bizzare survey from the NZX today with a series of very leading questions about the tax working groups recommendations?

surveys on there website too. I agree current recommendations would dis tort the playing field in favour of investing only in funds .... maybe thats the plan by fund managers more fees. shame for the nzx though be very few people left to provide liquidity as most big volume is done off market

[couta1]

Yeah, i got that. It's an odd easy to do a partition, if that's what it is.

I wish someone was able to get the govt to clarify why the behavior of buying stock privately needs corrected, and why we should be instead forced to invest via low yeilding kiwisaver monopolies... err i mean companies.

Perhaps a different thread, but does anyone have any news on cgt? I thought it was due to be announced on April fools, but ive not been able to find anything. I'll probably ring my accountant tomorrow. I wouldn't worry too much about the CGT, the end result will be only a shadow of the tax working groups recommendations IMO.PS-You should hear more on it sometime this month once the garden hose has been thoroughly applied.

[Timesurfer]

If I have to pay CGT on the shares I sell at a profit, will the Govt be refunding me when I sell at a loss?

It may not be the deathknell of private investment in stocks but it might see a reduction in trades as traders move to investors?
For example, if I was taking my profits from stocks to buy property, in the past I might sell stocks to get the capital gain out, whereas with CGT I would be better to leave the money invested and borrow against it. That way my tax remains unpaid.

Of course, extra tax on trades might make it harder for start up companies. Why take the risk investing in companies that you aren't sure will give long term gain.
On the other hand, is 70% of your "free money" enough of a disensentive to pull out of the stock game?

[winner69]

Bull.. 10000 today you reckon!

[777]

Well if it came in as CGT at marginal rates then I would trade a lot more. I often wish to sell something and buy back in at a lower price but am reluctant to do so lest I could be be proved to be trading. That concern would be gone.

It will still never happen.

[dobby41]

It may not be the deathknell of private investment in stocks but it might see a reduction in trades as traders move to investors?

Wouldn't traders already be paying tax on their profits since they buy with the intention to sell?
So why would traders move to be investors?

[couta1]

Well if it came in as CGT at marginal rates then I would trade a lot more. I often wish to sell something and buy back in at a lower price but am reluctant to do so lest I could be be proved to be trading. That concern would be gone.

It will still never happen. Yep a CGT would encourage more trading activity for sure.

[bull....]

Yep a CGT would encourage more trading activity for sure.

but not on the nzx if the tax advantage is with funds

[bull....]

no CGT will see us thru 10k in a sigh of relief , maybe we should start singing 20k soon lol as everyone starts buying now

[bull....]

just touching 10k :t_up:

[777]

Nzx50 10021.69 62.07 0.6%

[sb9]

Stock market busts through magic 10,000 markhttps://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12224546

[bull....]

Stock market busts through magic 10,000 mark

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12224546

continuation is very bullish , even australia is hitting 10yr highs today

[bull....]

68% chance of a rate cut in may in aus now according to futures , if they cut watch the nz/aud rate sky rocket.

just as in nz aus investors will need to lock in there income

[stoploss]

68% chance of a rate cut in may in aus now according to futures , if they cut watch the nz/aud rate sky rocket.

just as in nz aus investors will need to lock in there income
8th May , RBNZ OCR , so not too long before we can have a crack at closing the differential .......

[bull....]

8th May , RBNZ OCR , so not too long before we can have a crack at closing the differential .......

could be a big may. see the reits and utilities in aus being snapped up just like in nz. they also had a bad inflation number this week too just like here.

[stoploss]

could be a big may. see the reits and utilities in aus being snapped up just like in nz. they also had a bad inflation number this week too just like here.

Bad or Good inflation # ?

[bull....]

Bad or Good inflation # ?

guess if it goes below zero thats bad lol us markets just had a very tepid inflation reading today as well

Sliding U.S. Inflation May Provoke Fed Rate Cut Later This Yearhttps://www.bloomberg.com/news/articles/2019-04-25/asian-stocks-set-for-mixed-open-dollar-steadies-markets-wrap?srnd=premium-asia


then on the other hand

US economy defies slowdown fears with 3.2% first-quarter growthhttps://www.ft.com/content/0fe1aea0-680d-11e9-9adc-98bf1d35a056

so US at the moment has low inflation and good growth where as a lot of other countries have low inflation low growth , so question is will the US slow and join the rest or will the rest join the US?

[trader_jackson]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12225542

NZX doesn't win anymore they say... hard to see the index being good long term if companies keep leaving/getting taken over or straight up leaving (XRO)... with no replacements

[carrom74]

What happened at the end of the trading session just now ? A sudden spike ... any thoughts or news?

[sb9]

What happened at the end of the trading session just now ? A sudden spike ... any thoughts or news?

Looks like someone went for a bit of big buying spree across the board.

[bull....]

big portfolio buy , maybe they picking int rates about to drop next week?

[BlackPeter]

What happened at the end of the trading session just now ? A sudden spike ... any thoughts or news?

Great day for REITS (including retirement villages): OCA, SUM, ARG, KPG all nicely up ...

[bull....]

It’s never been cheaper to invest in the markets as asset managers slash fund fees by $5 billion
unless of course you live in NZ

https://www.cnbc.com/2019/05/02/its-never-been-cheaper-to-invest-in-the-markets-as-asset-managers-slash-fund-fees-by-5-billion.html

[Leftfield]

big portfolio buy , maybe they picking int rates about to drop next week?

Whatever it is I like it! A rare day when there are no red arrows anywhere in my portfolio!! Long may it last.

[Timesurfer]

Whatever it is I like it! A rare day when there are no red arrows anywhere in my portfolio!! Long may it last.
Interesting you say that. Yesterday the only arrows I had were red ones - my watch list on the other hand only green!
Today almost no movement with sales within my shares and only red arrows on my watch list.
Such a fickle beast if you watch it on a daily basis.

[bull....]

RBNZ decision this afternoon

my guesses if he cuts

drop in dollar and share market re - coups losses

if he doesnt cut

bigger rise in dollar because market is tilted more to cut and share market tanks


nzx hrly support at 9945 - 9950 by the way so a no cut will amplify the fall thru support

[bull....]

RBNZ cuts to OCR 1.5%

https://www.rbnz.govt.nz/news/2019/05/official-cash-rate-reduced-to-1-5-percent

right move , staying ahead of the curve. dollar drop will be a big help to exporters.
how about stock market bounced right of support before the announcement

[peat]

RBNZ cuts to OCR 1.5%

https://www.rbnz.govt.nz/news/2019/05/official-cash-rate-reduced-to-1-5-percent

not much immediate positive effect in my portfolio but I do see the index went up a little

10527

[couta1]

not much immediate positive effect in my portfolio but I do see the index went up a little

10527 Underpins good divvy paying stocks.

[bull....]

Underpins good divvy paying stocks.

gentailers well supported , some banks are dropping deposit rates already on term deposits.

how about zero on term deposits when trump goes full on trade war?

[couta1]

gentailers well supported , some banks are dropping deposit rates already on term deposits.

how about zero on term deposits when trump goes full on trade war? Take a look at ZEL, the divvy lovers have awoken. PS-Power companies currently too dear IMO and I've put my money where my mouth is by buying a truckload of ZEL.

[bull....]

Asked at a press conference whether the RBNZ still has an easing bias, Orr said: “We think we’re in a good position to be able to observe the data as it unfolds. Our forecast track is a slightly lower path than just one cut, but the uncertainties around that path are large

https://www.bloomberg.com/news/articles/2019-05-08/new-zealand-cuts-interest-rates-to-historic-low-currency-drops

[bull....]

So, one year on and PGW has lost seeds biz, and TGH gone. These two deals still pending or binned?
I'm anticipating something in next 3 weeks :D.

what you think? im picking scales to make big investment announcement

[pierre]

Not quite sure where to post this news but for those who weren't watching the ASX today, XRO who used to be listed on the NZX hit $60AUD today after release of their annual results. Take pity on poor old Rod Drury who no longer receives a paycheck from the company - his holdings in XRO are now worth only a bit over $1 billion. What a fantastic achievement!

[bull....]

Not quite sure where to post this news but for those who weren't watching the ASX today, XRO who used to be listed on the NZX hit $60AUD today after release of their annual results. Take pity on poor old Rod Drury who no longer receives a paycheck from the company - his holdings in XRO are now worth only a bit over $1 billion. What a fantastic achievement!

good for him , deserves it. If only more people in nz could achieve the same.

would the nzx be at 12000 if xro was still listed?

[bull....]

may 30 is budget day

A focus on wellbeing does not change the reality of a slowing economyhttps://www.stuff.co.nz/national/politics/opinion/112892939/a-focus-on-wellbeing-does-not-change-the-reality-of-a-slowing-economy



I see RBA say rate cut on cards now , that pump the aud/nzd cross back up towards parity .

[winner69]

may 30 is budget day

A focus on wellbeing does not change the reality of a slowing economyhttps://www.stuff.co.nz/national/politics/opinion/112892939/a-focus-on-wellbeing-does-not-change-the-reality-of-a-slowing-economy



I see RBA say rate cut on cards now , that pump the aud/nzd cross back up towards parity .

Dominic from Westpac on the radio this morning says GDP heading back to 3% later this year

If you like buzzwords a must listen
https://www.rnz.co.nz/audio/player?audio_id=2018696125

[bull....]

Dominic from Westpac on the radio this morning says GDP heading back to 3% later this year

If you like buzzwords a must listen
https://www.rnz.co.nz/audio/player?audio_id=2018696125

Government to give itself more wiggle room to spend, as Finance Minister announces 20% debt/GDP target will be replaced by a broader target of 15%-25% from 2021

https://www.interest.co.nz/news/99828/government-give-itself-more-wiggle-room-spend-finance-minister-announces-20-debtgdp

must be finally recognising the slowdown , hope they spend the borrowed money on worth while stuff

[bull....]

The global bond rally gathered pace, with yields in Australia and New Zealand dropping to record lows

https://www.bloomberg.com/news/articles/2019-05-29/new-zealand-yields-fall-to-fresh-record-low-amid-risk-aversion?srnd=premium-asia

get your income why you can

[bull....]

BNZ economists see the likelihood of another interest rate cut increased by the results of the latest ANZ Business Outlook Survey

https://www.interest.co.nz/business/99928/bnz-economists-see-likelihood-another-interest-rate-cut-increased-results-latest-anz

odds probably increased even more now since the RBA hintng rates will drop and the market saying could reduce there rates 2 - 3 times and are even discussing helicopter money

[winner69]

BNZ economists see the likelihood of another interest rate cut increased by the results of the latest ANZ Business Outlook Survey

[URL]https://www.interest.co.nz/business/99928/bnz-economists-see-likelihood-another-interest-rate-cut-increased-results-latest-anz

odds probably increased even more now since the RBA hintng rates will drop and the market saying could reduce there rates 2 - 3 times and are even discussing helicopter money

That man Orr out of his depth

[bull....]

the well being budget is out and the markets have voted .... yawn

[BlackPeter]

the well being budget is out and the markets have voted .... yawn

I feel some unwellness coming on ;);

[bull....]

After keeping rates on hold for nearly three years, on Tuesday the Reserve Bank will almost certainly cut the official cash rate (https://www.abc.net.au/news/2019-05-21/reserve-bank-poised-to-cut-interest-rates-in-june/11134160) to a record low of 1.25 per cent.

https://www.abc.net.au/news/2019-05-31/banks-race-against-rba-to-cut-interest-rates/11167650?section=business

markets pricing in 2-3 cuts now , will find out tomorrow. Could propel our dollar higher

[sb9]

After keeping rates on hold for nearly three years, on Tuesday the Reserve Bank will almost certainly cut the official cash rate (https://www.abc.net.au/news/2019-05-21/reserve-bank-poised-to-cut-interest-rates-in-june/11134160) to a record low of 1.25 per cent.

https://www.abc.net.au/news/2019-05-31/banks-race-against-rba-to-cut-interest-rates/11167650?section=business

markets pricing in 2-3 cuts now , will find out tomorrow. Could propel our dollar higher

As expected RBA cut rates to 1.25% matching RBNZ's rate from last month. Question will RBNZ cut again when they meet next time?

[winner69]

As expected RBA cut rates to 1.25% matching RBNZ's rate from last month. Question will RBNZ cut again when they meet next time?

Off course Orr will cut again and probably next meeting

Foolish move but can't keep that Orr man out of the limelight

Australia and NZ economies must be really stuffed - don't central banks only cut to stimulate the economy?

[bull....]

Stats NZ cuts surveys and relies on insurance payments to bolster its budgethttps://www.stuff.co.nz/business/113254428/key-tourism-data-lost-in-stats-nz-cost-cutting

this after the axing of immigration data as well , the govt must be wanting to keep us all in the dark about whats happening in the economy

[bull....]

some interest rates swaps went under 1% in aus yesterday .. wow a look into the future rates in nz ?

[bull....]

some interest rates swaps went under 1% in aus yesterday .. wow a look into the future rates in nz ?

last week i was have heartlerly joking about nz 1% rates and just saw on bloomberg an interview with jp morgan person saying they see RBNZ rates at 1% by xmas. think they implied the growth in nz is slowing quick thats why

get your income why you can

[bull....]

the calls are getting louder - today

ANZ Bank says there is a “very real” chance that New Zealand's monetary policy will run out of conventional ammunition and suggested the central bank look at a series of unconventional measures, including quantitative easing

http://www.sharechat.co.nz/article/65dd3d4a/very-real-chance-monetary-policy-will-run-out-of-ammo-anz.html


In AUS

Economists say the policy of large-scale money printing by the Reserve Bank is now officially on the table, and it needs to be discussed more openly

https://www.abc.net.au/news/2019-06-18/reserve-bank-must-consider-quantitative-easing,-economists-say/11218476?section=business

get your income why you can .

[kiora]

Locked in.Totally agree Bull

[Timesurfer]

On the other hand the rest of the market seems pretty optimistic today.

[sb9]

On the other hand the rest of the market seems pretty optimistic today.

May be in the hope of expected rate cut and lower rates here for longer.

[peat]

the calls are getting louder - today

ANZ Bank says there is a “very real” chance that New Zealand's monetary policy will run out of conventional ammunition and suggested the central bank look at a series of unconventional measures, including quantitative easing

http://www.sharechat.co.nz/article/65dd3d4a/very-real-chance-monetary-policy-will-run-out-of-ammo-anz.html




I'm seeing some political forces occurring here. What with Grant Robertson slamming off about the RBNZ censure and criticism of Key's blaming a junior staffer. ANZ putting their oar in is I suspect politically motivated.
Personally I don't think we'll get to negative interest rates here. Or printing kiwi $ for economic reasons. (We should have done that when NZD/USD was a lot higher but of course RBNZ doesn't really want to play the game of speculating)

[bull....]

I'm seeing some political forces occurring here. What with Grant Robertson slamming off about the RBNZ censure and criticism of Key's blaming a junior staffer. ANZ putting their oar in is I suspect politically motivated.
Personally I don't think we'll get to negative interest rates here. Or printing kiwi $ for economic reasons. (We should have done that when NZD/USD was a lot higher but of course RBNZ doesn't really want to play the game of speculating)

i read ( cant remember where ) that ANZ only had about 700m capital on hand for a big event. no wonder the RBNZ is doing capital reviews everyone would go bust when they didnt get there deposits back.

anyway RBA minutes just out and they say more rate cuts coming

[petty]

Thoughts on what good options are in these times? Cash, utilities?

[winner69]

Thoughts on what good options are in these times? Cash, utilities?

Often best thing to do is just pack your bags and go on a long holiday and enjoy yourself and new experiences ....and forget about money.

[Timesurfer]

Ammunition is a good place to start if the financial collapse is coming. Otherwise the zombies will take what the prudent people have stashed away, and if you pick the wrong option you will be needing to negotiate with those that picked the right option.
Can’t eat gold bullion or bundles of printed paper.

[BlackPeter]

Ammunition is a good place to start if the financial collapse is coming. Otherwise the zombies will take what the prudent people have stashed away, and if you pick the wrong option you will be needing to negotiate with those that picked the right option.
Can’t eat gold bullion or bundles of printed paper.

I dare to disagree, unless you are a trained soldier and have enough resources to man a 24/7 guard for your "fort". Armed people are considered combattants and much more likely to die in any conflict than unarmed people ... just read the history of the Wild West.

[peat]

i thought this was the Good News thread!!

Lots of cash and cash equivs , some good quality shares, a few bonds but not too many(corporate or government depending on how gloomy you are) some units of gold of silver that are small enough to be useful for barter.
Thats how I see safety. Once it gets to guns and ammo its all over

[whirly]

Tobacco and lots of it. Lightweight, easy to carry. Expensive. Huge demand when everyone's stressed out. And best of all. Easy to grow.

[IAK]

Ammunition is a good place to start if the financial collapse is coming. Otherwise the zombies will take what the prudent people have stashed away, and if you pick the wrong option you will be needing to negotiate with those that picked the right option.
Can’t eat gold bullion or bundles of printed paper.

I agree better to go out in a blaze of glory imo.

[petty]

Haha, thanks peat. While I did appreciate the banter it was good to get a semi serious response. While I have some basic skills in evaluating good companies from bad I don’t have enough life history to guide how to manage what people are predicting to be a messy correction resulting form the massive debt loadings out there. I’m heading for utilities, some retirement sector. 30% cash. Some dabbles in A2 while managing its mood swings. 30 yrs old so happy to be on the more risky side of the ledger and might try a small hunk of gold for good measure.

[Timesurfer]

Goldmines can do better than gold which moves relatively slowly.
The jury is still out on NTL though so dyor on that one (I do have a handful just in case myself).

[bull....]

4-German 10-yr yield slumps to -0.30% on Draghi's stimulus klaxon
https://www.reuters.com/article/eurozone-markets/update-3-german-10-yr-yield-slumps-to-0-30-on-draghis-stimulus-klaxon-idUSL8N23P1YB


You have to pay .3% to the banks to hold your deposits , no wonder overseas people want to invest in NZ

[blackcap]

4-German 10-yr yield slumps to -0.30% on Draghi's stimulus klaxon
https://www.reuters.com/article/eurozone-markets/update-3-german-10-yr-yield-slumps-to-0-30-on-draghis-stimulus-klaxon-idUSL8N23P1YB


You have to pay .3% to the banks to hold your deposits , no wonder overseas people want to invest in NZ

Yeah its an interesting phenomena. I have to pay my dutch broker to keep my Euro's in their equivalent of cash management account. (its not much and the amount I have there is not much but boy does it play tricks with the mind when you see your statement with - interest, when you have a + account balance)

[777]

Time to invest in a mattress manufacturer.

[bull....]

Time to invest in a mattress manufacturer.

no gentailers they are on fire , div yield offers security when rates go to zero

[winner69]

Pretty solid GDP numbers out this morning .....0.6% for the quarter and 2.5% annual

Better than RB and Treasury forecasts

Doesn’t justify OCR cuts in medium term

But Orr has his own agenda so we better pump up the economy even further

[bull....]

Pretty solid GDP numbers out this morning .....0.6% for the quarter and 2.5% annual

Better than RB and Treasury forecasts

Doesn’t justify OCR cuts in medium term

But Orr has his own agenda so we better pump up the economy even further

think the next cut is priced in for later in the yr

[Blue Skies]

Not sure why Orr's being dumped on & just want to put in a good word for our RBG.
Everything so up in the air at the moment with US China India tariff wars, Brexit & whole UK mess, massive debt, record low interest rates, housing etc, must be the most challenging period for RB in decades.
As RBG he's a breath of fresh air & a great communicator, trying to reach out to & convey some economic literacy to the 95% of the population (including most of the media who report this stuff) who somehow have reached adulthood without any curiosity or idea of finance & the way economic issues directly impact their lives.
Plus trying to increase protection for bank depositors ( & ultimately tax payers) in these uncertain times, against some pretty shonky undermining from the 'too big to let fail' banks who've been aided & abetted by some clueless journalism.

[bull....]

RBNZ meeting this week , not expecting a cut. G20 the highlight at this point of time for main market moving events this week.

[bull....]

intelligent politicians have finally realised a deposit insurance scheme might be in NZ interest. As the only developed country without one it took long enough although its not been approved and is only in principle lets hope they get a move on the next crash might be just around the corner.

Deposit protection reduces case for RBNZ bank capital increase, Grant Robertson says
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12243499

[bull....]

rbnz wants your views on potential QE

RBNZ review seeks wider input on quantitative easinghttp://www.scoop.co.nz/stories/BU1906/S00651/rbnz-review-seeks-wider-input-on-quantitative-easing.htm

[BlackPeter]

rbnz wants your views on potential QE

RBNZ review seeks wider input on quantitative easinghttp://www.scoop.co.nz/stories/BU1906/S00651/rbnz-review-seeks-wider-input-on-quantitative-easing.htm

Cool. QE is an amazing tool to drive property and stock values into the stratosphere. Investors must be well positioned ;);

[bull....]

Cool. QE is an amazing tool to drive property and stock values into the stratosphere. Investors must be well positioned ;);

i would prefer 100k in my bank account rather than bond buying, i will let them know

[bull....]

more rates cuts still on later this yr

https://www.rbnz.govt.nz/news/2019/06/official-cash-rate-unchanged-at-1-5-percent

The Official Cash Rate (OCR) remains at 1.5 percent. Given the weaker global economic outlook and the risk of ongoing subdued domestic growth, a lower OCR may be needed over time to continue to meet our objectives

[Blue Skies]

intelligent politicians have finally realised a deposit insurance scheme might be in NZ interest. As the only developed country without one it took long enough although its not been approved and is only in principle lets hope they get a move on the next crash might be just around the corner.

Deposit protection reduces case for RBNZ bank capital increase, Grant Robertson says


https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12243499

Agreed absolutely essential, though v disappointed to hear it may only cover deposits up to $30,000 or possibly $50,000 which is way too low Imo.
Don't know how accurate these figures are but read that would cover 90% of depositors, but only 40% of bank deposits.
Would hate to think the R.B. pushed into accepting this little sticking-plaster as good enough. Australia guarantees up to $250,000.
If HMS NZ Inc hits an iceberg, no good the govt saying, stay calm everybody we have enough life boats to go around. Oh no Grant, we don't!

[kiora]

You like?
" Cyprus. There, the 2012 financial crisis led the Cypriot government to confiscate its citizens’ savings, obviously without asking first. Everyone with a bank account containing over €100,000 had to contribute 9.9% to the empty coffers of the State, and those with less paid 6.75%."
https://tax-free.today/blog/4-lessons-greek-crisis-protect-savings/

[ratkin]

Agreed absolutely essential, though v disappointed to hear it may only cover deposits up to $30,000 or possibly $50,000 which is way too low Imo.
Don't know how accurate these figures are but read that would cover 90% of depositors, but only 40% of bank deposits.
Would hate to think the R.B. pushed into accepting this little sticking-plaster as good enough. Australia guarantees up to $250,000.
If HMS NZ Inc hits an iceberg, no good the govt saying, stay calm everybody we have enough life boats to go around. Oh no Grant, we don't!

The amount is a bit pathetic, already spread mine around the different banks but if it is only 30k then why even bother. 50 is better than nothing but in this day and age it not exactly a fortune.

[bull....]

RBA meeting tomorrow

RBA poised to swing the axe on rates again; the market says it has to
https://www.abc.net.au/news/2019-06-30/rba-poised-to-swing-the-axe-on-rates-again/11260572?section=business

makes our yields look even better still when they cut

[bull....]

Business confidence plunge: ASB predicts big rate drop


https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12245766

With economic momentum continuing to slow, we now expect the RBNZ will cut the OCR twice more, in August and November, bringing the Official Cash Rate (OCR) to 1 per cent," ASB economist Jane Turner said.

get your income why you can

dont forget rba at 4.30pm

[sb9]

RBA meeting tomorrow

RBA poised to swing the axe on rates again; the market says it has to


https://www.abc.net.au/news/2019-06-30/rba-poised-to-swing-the-axe-on-rates-again/11260572?section=business

makes our yields look even better still when they cut

As widely expected, they cut rates down to 1% this arvo.

[bull....]

As widely expected, they cut rates down to 1% this arvo.

and pricing is for another cut before xmas

RBA cuts again and leaves room for more

https://thebull.com.au/rba-cuts-again-and-leaves-room-for-more/

just adds to the pressure on the RBNZ TO KEEP CUTTING

[bull....]

The need for the Reserve Bank to cut the Official Cash Rate to 1% and below looks "increasingly likely" according to economists at Kiwibank
https://www.goodreturns.co.nz/article/976515163/ocr-below-1-increasingly-likely-kiwibank.html

[GTM 3442]

Why the straitjacket of 0.25% movements? Would a series of movements at 0.1% do?

[Lego_Man]

Deposit protection insurance with no capital requirement hike, is just a taxpayer subsidy to bank shareholders...does Grobocop understand that or is he too thick to see through the bank spin?

[peat]

Why the straitjacket of 0.25% movements? Would a series of movements at 0.1% do?
I'd suggest that as we move towards Zero the effect of a reduction in the OCR becomes weaker. I'd doubt that 0.1 would do anything




Deposit protection insurance with no capital requirement hike, is just a taxpayer subsidy to bank shareholders...does Grobocop understand that or is he too thick to see through the bank spin?

But it is paid for by the banks. There is a levy of some small basis called by the government. At least that's my understanding of how these Deposit Insurance schemes work.

Not that I agree with them myself, but what will be will be. I can kind of see the fact that most depositors wont have any real idea of how secure each bank is relative to another but that's something why financial literacy is a useful skill.

[bull....]

NZ IN DISPARATE NEED OF INFRASTRUCTURE

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12248137

NO kidding what happened to grant robinsons PPP's or the infrastructure funds? more arse blowing eh

[Timesurfer]

Wait until the tide comes in an extra metre or two. Everyone will be out there with their electric diggers going hard out to keep up.

[bull....]

The first rate cut, when the economy isn’t in a recession, leads to a stock market rally 100% of the time, according to data compiled by Fundstrat going back to 1971

https://www.cnbc.com/2019/07/10/when-the-fed-cuts-rates-without-a-recession-stocks-go-higher-100percent-of-the-time.html

[bull....]

Australia's ASX Prepares for Negative Interest-Rate Trading
markets are preparing for the potential introduction of quantitative easing in yet another Group-of-10 nation.

https://www.bloomberg.com/news/articles/2019-07-15/australia-s-asx-prepares-for-negative-interest-rate-trading

get your income why you can

[bull....]

RBNZ to Refresh Unconventional Policy Strategy as Rates DropNew Zealand’s central bank is taking another look at its strategy for unconventional monetary policy as its official cash rate looks set to plumb fresh record lows.

https://www.bloomberg.com/news/articles/2019-07-22/rbnz-to-refresh-unconventional-policy-strategy-as-rates-drop

better to be prepared

[bull....]

Borrowers of all kinds have been clear benefactors of this sea change, with many nations and companies locking in low rates for as long as a century. Belgium and Ireland have sold 100-year bonds, as did Austria this year (https://www.bloomberg.com/news/articles/2019-06-26/europe-s-newest-century-bond-seeks-to-lure-funds-despite-length) at a yield of 1.171%.

https://www.bloomberg.com/news/articles/2019-07-23/a-decade-of-low-interest-rates-is-changing-everything

Seems everyone is locking in low rates to do stuff except NZ. Maybe a working group is needed to find out why?


looks like queenstown property going down the gurgler

Foreign Buyer Ban Hits House Prices in Wealthy Winter Playgroundhttps://www.bloomberg.com/news/articles/2019-07-22/foreign-buyer-ban-hits-house-prices-in-wealthy-winter-playground

[bull....]

Business confidence slumps on construction sector woes


https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12254447


fits our view of rapid down turn in the economy in the second half yr esp business intentions measure. RBNZ wont like that update i imagine and with the market expecting 90% chance of a rate cut should they not move now i imagine the reaction will be savage.

good summary here

https://www.interest.co.nz/business/100966/anz-business-outlook-survey-shows-worst-sentiment-construction-sector-2009-while

[sb9]

He's gone for double cut...how low can you go....

Reserve Bank cuts official cash rate to 1.0 pcthttps://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12256484

[bull....]

Business confidence slumps on construction sector woes


https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12254447


fits our view of rapid down turn in the economy in the second half yr esp business intentions measure. RBNZ wont like that update i imagine and with the market expecting 90% chance of a rate cut should they not move now i imagine the reaction will be savage.

good summary here

https://www.interest.co.nz/business/100966/anz-business-outlook-survey-shows-worst-sentiment-construction-sector-2009-while

was right about the rbnz will have been concerned about the rapid slowdown coming hence the cut to 1% , better to front run it. the cny happenings will have made them go 50 as well i imagine

[bull....]

hilarious ASB drops 4bp of there mortgage rates after a .5% cut to the ocr lol guess there wanting even more record profits next year. wont stimulate the housing market any that small cut lol

[Filthy]

hilarious ASB drops 4bp of there mortgage rates after a .5% cut to the ocr lol guess there wanting even more record profits next year. wont stimulate the housing market any that small cut lol

will be waiting for another bank to blink first, then they will all follow.
agree though mate, its not all going to be passed on is it! lol

[enzed staffy]

sadly the effects will be passed on in an unbalanced fashion to the banks benefits - the term deposit rates will almost certainly be cut promptly, mortgage rates.....?not so much

[dobby41]

hilarious ASB drops 4bp of there mortgage rates after a .5% cut to the ocr lol guess there wanting even more record profits next year. wont stimulate the housing market any that small cut lol

How much did they drop their deposit rates?
The OCR doesn't really drive long term mortgage rates.

[bull....]

How much did they drop their deposit rates?
The OCR doesn't really drive long term mortgage rates.

correct to a degree the ocr can more directly influence short term lending but also swap rates and these swap rates are what drive longer term lending. swap rates have dropped heaps in the last week in anticipation of lower interest rates. thats why i laugh at the measly 4bp reduction in 2 yr rate by asb when swap rates have dropped by massively more than this.

[percy]

Think margin.
Bank borrows at 4% and lends at 6% their margin is 50%.
So for every $1 mil they borrow they make gross $200,000 which would cover overheads and produce a healthy profit.
Should they borrow at @ 2% and still lend at 50% margin their !mil borrowed would only produce $100,000 to cover overheads etc.
Most overheads are fixed,staff,rents etc,so it is harder for them to reduce what they charge you,[so they can stay in business].
That is why higher interest rates work in their favour.

[yabster]

sounds like you hold a few banking stocks Percy....;)

[percy]

sounds like you hold a few banking stocks Percy....;)
No.Just a lot of HGH and TRA.
Figures are the same for finance companies.

[bull....]

swap rates in NZ had massive falls yesterday. I wouldnt believe banks saying fixed rates wernt dropped because it was priced in as some are saying in the media , what a load of crock the re action in the bond and swap markets means traders were not pricing it in therefore the banks are increasing there margins by not passing on the cuts.
the ocr cut will do little to stimulate demand in the economy mainly because if banks dont pass on the cuts there no more money in peoples pockets and with 80% of people odd on fixed rates a big drop from over the top rates in floating is going to do jack s..t to help the economy.

So I am thinking negative rates are coming because its a worldwide race to the bottom at the moment by some central banks ( look at the huge drop in global rates tonight , massive) and nz being so exposed to this is not really going to be able to do much to stop the impact coming. bit like a stock trend short term doenst change the long term trend the only thing to help nz in the long run is fiscal and i wouldnt rely on the govt coming to the rescue because by the time the working group has finished there conclusions it will be too late lol.

get your income why you can

[bull....]

from rock star economy to rates near zero nz economy flops

https://www.bloomberg.com/news/articles/2019-08-07/from-global-heroes-to-rates-near-zero-rockstar-economies-flop?srnd=premium-asia

[Aarrgghh]

I'm not saying the NZ economy isn't on very shaky ground right now, but that article is way off the mark

"Similarly, while growth in dairy consumption by Chinese households was massive, it was going to have its limits."

Except, dairy prices have been about the same, or a mild increase over the past 5 years, and I would be surprised if we have reduced production over the past 5 years?

https://www.globaldairytrade.info/en/product-results/whole-milk-powder/ (https://www.globaldairytrade.info/en/product-results/whole-milk-powder/)

My gut feeling is that they dropped the interest rate more in reaction to the domestic housing market being now firmly decreasing - if they let it crash then the impact will be much worse to the national economy rather than letting it down easily.

[winner69]

This chart looks more amazing every time it’s updated (from AMP Report)

And this in the context of slowing earnings growth “ ....using Jarden numbers, NZ year-ahead EPS forecasts are 6% lower than they were one year ago....”

[winner69]

That chart above shows that at Jan 2012 the PE of the NZX was 13.3 ...when the index was 3400

The NZX is now 10,900 odd ..220% higher over 7 years ...about 18% pa (which does include reinvested divies)

But company profits measured by EPS have only increased by 4.0% pa

If the PE of the NZX50 had not expanded in the last 7 years it would be a miserable 4500 now

The happy market (ie improved sentiment / PE expansion) has driven 85% of the market gains in the last 7 years....company performance (increased profits) only 15%

Mr P as famous for saying ‘the market giveth, but the market also taketh away’. The market sure has given us heaps lately eh

[kiora]

Headed to the bottom
https://www.interest.co.nz/charts/interest-rates/bank-bill-rates

[bull....]

treasury in NZ just say negative .35% ocr could happen - WOW

[winner69]

This is actually quite good

https://www.stuff.co.nz/business/opinion-analysis/114890483/steven-joyce-interest-rates-are-at-an-historic-low--now-what?rm=m

[bull....]

ASB cuts all its fixed mortgage rates again, taking market leading positions for many terms, after raising some very cheap funding. It cuts term deposit rates too

https://www.interest.co.nz/personal-finance/101214/asb-cuts-all-its-fixed-mortgage-rates-again-taking-market-leading-positions

good to see ASB leading the charge , need too drop them further to help the economy. more money in peoples pockets is what needed for coming NZ down draft.

[Stranger_Danger]

Every cafe I go to lately, I seem to be next to a table of white haired people talking about yield and how to get more of it.

Most of what they're thinking about makes sense - in 2011!

I don't know how many shots across the bow these folk will need, but the primary goal at this point should be capital preservation.

[bull....]

Every cafe I go to lately, I seem to be next to a table of white haired people talking about yield and how to get more of it.

Most of what they're thinking about makes sense - in 2011!

I don't know how many shots across the bow these folk will need, but the primary goal at this point should be capital preservation.

not surprised to hear grey power are concerned about yield.

there might be a wave of grey hair sweeping up queen st or where ever similar to scenes like hong kong when rates go negative. Anyway wonder if this is why ORR got made the RBNZ head

Think tank and lobbyist the NZ Initiative is concerned the Reserve Bank might "morph" into something resembling a sovereign wealth fund when they start QE

https://www.interest.co.nz/bonds/101198/lobbyist-and-think-tank-nz-initiative-concerned-reserve-banks-role-could-morph-once-it

gUESS ORR GOT THE SKILLS

[bull....]

nzx50 probably take a big hit today i reckon , more than likely a2 leading the way.

double top formed on the dailies? time will tell. Also i see US and Japan have announced a trade agreement on sunday which may damage our dairy exports to japan

U.S. Trade Representative Robert Lighthizer also commented on the content of the proposed deal, which he said would open markets to $7 billion of products including ethanol, as well as beef, pork, dairy products and wine

https://www.bloomberg.com/news/articles/2019-08-25/trump-says-very-close-to-japan-trade-deal-before-abe-meeting?srnd=premium-asia

[emveha]

Is a2 even present in Japan?

[bull....]

Is a2 even present in Japan?

a2 normally leads market down on big down days as its a high beta stock. was not implying a2 was affected by the trade deal

[Balance]

a2 normally leads market down on big down days as its a high beta stock. was not implying a2 was affected by the trade deal

Traders love this stock and those who took long positions on Friday will be looking to bail out first thing this morning - before ASX opens.

Such is life!

[bull....]

Business confidence deteriorates in August
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12263154

worst yet i think and the nzd continues to plummet soon it will be at levels of the GFC

[bull....]

BNZ matches its main rivals with some key home loan rate cuts for its 'special' offers, but goes with steeper reductions for term deposits, dropping below almost all its rivals

https://www.interest.co.nz/personal-finance/101477/bnz-matches-its-main-rivals-some-key-home-loan-rate-cuts-its-special-offers


in another yr mortgages and term deposits will be lower still and i guess gentailer yields will be too.

[BlackPeter]

BNZ matches its main rivals with some key home loan rate cuts for its 'special' offers, but goes with steeper reductions for term deposits, dropping below almost all its rivals

https://www.interest.co.nz/personal-finance/101477/bnz-matches-its-main-rivals-some-key-home-loan-rate-cuts-its-special-offers


in another yr mortgages and term deposits will be lower still and i guess gentailer yields will be too.

... you are probably right. I guess the 64 trillion dollar question is - when will this trend turn - and what will trigger the change?

[winner69]

Median earnings growth for 2020 slashed to 4.2%

And the NZX50 is on a forward PE of over 30 (Jardens)


http://www.sharechat.co.nz/article/49b2fd82/analysts-downgrade-earnings-amid-deepening-business-pessimism.html?utm_medium=email&utm_campaign=Analysts%20downgrade%20earnings%20ami d%20deepening%20business%20pessimism&utm_content=Analysts%20downgrade%20earnings%20amid %20deepening%20business%20pessimism+CID_a6f637810e 6b280f5d1c90ebb143a28e&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle49b2fd82analys ts-downgrade-earnings-amid-deepening-business-pessimismhtml

[RTM]

.........in another yr mortgages and term deposits will be lower still and i guess gentailer yields will be too.

But the big question is...why will the gentailers yields be lower ? Because they have reduced the dividend per share or because the share price has gone up even more ? Dream run with the gentailiers at the moment, that’s for sure. Still worry about regulatory risk.

[winner69]

But the big question is...why will the gentailers yields be lower ? Because they have reduced the dividend per share or because the share price has gone up even more ? Dream run with the gentailiers at the moment, that’s for sure. Still worry about regulatory risk.

Share price go up even more

[bull....]

They were just talking about NZ on bloomberg TV saying traders smell blood going for the jugular as they sense something is up. record shorts on the NZD , 83% chance of another rate cut coming , record business pessamum.

[bull....]

gentailers on fire except gne by the look of things opportunity for catchup play? ... get your income why you can. in other news lol grant robinson is going to be on bloomberg tv soon , wonder if hes trying to calm traders down after the talk yesterday?

[sb9]

gentailers on fire except gne by the look of things opportunity for catchup play? ... get your income why you can. in other news lol grant robinson is going to be on bloomberg tv soon , wonder if hes trying to calm traders down after the talk yesterday?

CEN seem to be pick of gentailers at the moment, recovered full divvy plus some gains. And ZEL isn't looking too shabby either after getting close to $6 recently after Comcom report.

[bull....]

CEN seem to be pick of gentailers at the moment, recovered full divvy plus some gains. And ZEL isn't looking too shabby either after getting close to $6 recently after Comcom report.

as of yesterday mel up 49% this yr , cen 46% , mcy 43% , gne at 32% and tpw at 26% are the laggards. So the question one has to ask themselves is gne and tpw both lagging in stock performance and with greater yields than the others got more room to run? since they havnt reall y taken part in the most recent run

[sb9]

as of yesterday mel up 49% this yr , cen 46% , mcy 43% , gne at 32% and tpw at 26% are the laggards. So the question one has to ask themselves is gne and tpw both lagging in stock performance and with greater yields than the others got more room to run? since they havnt reall y taken part in the most recent run

Big buy up into close on all gentailers...man this is unreal.

[bull....]

Big buy up into close on all gentailers...man this is unreal.

unreal because who thought gentailers could lead a bull maket. but perfectly understandable in the context of zero rates available overseas and quite possibly coming to NZ. if NZ does go negative rates even the yields of gentailers now will look very good in hindsight.

[bull....]

Dow jones utilities in US hitting new highs

heres a interesting read

Morgan Stanley: Investors should short growth stocks, get defensive as ‘recession fears emerge’


https://www.cnbc.com/2019/09/03/morgan-stanley-get-defensive-as-recession-fears-emerge.html

At the end of a growth scare when recession fears emerge, secular growth stocks typically underperform defensives,” Wilson says

Also on a side note US 10yr hitting new lows today not dfar from all time lows now and NZ 10yr hitting fresh lows as are swap rates

[winner69]

unreal because who thought gentailers could lead a bull maket. but perfectly understandable in the context of zero rates available overseas and quite possibly coming to NZ. if NZ does go negative rates even the yields of gentailers now will look very good in hindsight.

Man on radio this am said a couple of NZ gentailers going to get included in global indices ...drove the big buy up yesterday he said

[bull....]

Man on radio this am said a couple of NZ gentailers going to get included in global indices ...drove the big buy up yesterday he said

how about because they cheap?

On a dividend discount model which seems appropriate considering everyone wants dividends at the moment

approx values

at a 4% discount rate implies values of

mcy $3.95
mel $4.98
cen $10.01
gne $4.36

on a 3% discount rate

mcy $5.10
mel $6.42
cen $12.91
gne $5.63

on a 2% discount rate

mcy $6.96
mel $8.77
cen $17.63
gne $7.68

think ya get the idea the lower the discount rate goes ( being like say 10yr nz govt bond is actually 1%) the more valuable gentailer dividends become and hence the share price becomes more valuable for the income stream. sort of explains the insatable demand for these cheap stocks in this environment.

depends on your inputs of course but discount rate is a major part of most valuations

[BlackPeter]

how about because they cheap?

On a dividend discount model which seems appropriate considering everyone wants dividends at the moment

approx values

at a 4% discount rate implies values of

mcy $3.95
mel $4.98
cen $10.01
gne $4.36

on a 3% discount rate

mcy $5.10
mel $6.42
cen $12.91
gne $5.63

on a 2% discount rate

mcy $6.96
mel $8.77
cen $17.63
gne $7.68

think ya get the idea the lower the discount rate goes ( being like say 10yr nz govt bond is actually 1%) the more valuable gentailer dividends become and hence the share price becomes more valuable for the income stream. sort of explains the insatable demand for these cheap stocks in this environment.

depends on your inputs of course but discount rate is a major part of most valuations


Interesting numbers, though obviously - international investors would need to take as well the exchange rate risk into consideration. If times get tough, the NZD might drop like a stone vs major currencies ... which sort of screws up all of the above valuations.

[winner69]

Proof that analysts / wealth managers use magic

Mark Lister from Craig’s has a Magic Talk

https://omny.fm/shows/magic/craigs-ip-market-update-with-mark-lister-monday-2#description

[RupertBear]

Proof that analysts / wealth managers use magic

Mark Lister from Craig’s has a Magic Talk

https://omny.fm/shows/magic/craigs-ip-market-update-with-mark-lister-monday-2#description

Thanks for sharing Winner, new to me, ;)

[bull....]

Government debt is low and borrowing is cheap; time to think very big
https://www.stuff.co.nz/business/opinion-analysis/115552407/government-debt-is-low-and-borrowing-is-cheap-time-to-think-very-big

sadly grant robinson is looking more and more all talk and no action. the man who said he would get ppp etc and kiwisaver funds investing in infrastructure , listed vehicles for infrastruction yawn maybe another working group might get things moving along.

[bull....]

ANZ picks OCR to keep falling - three more cuts by May
"We now expect 25 basis point OCR cuts in November, February and May, taking the OCR to 0.25 per cent," ANZ chief economist Sharon Zollner wrote in research released this morning.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12265366


no wonder people are scrambling to get ther income stocks .... why they last

[value_investor]

Incredibly silly to have shaved the .50 percentage off the interest rate and even worse imo if they are planning more rate cuts. I thought the policy statement was to keep inflation at a mid point of 2%, which it was at (1.9%) at the last figure released. GDP is tracking along well too so its not a growth concern.

The capital markets are grossly overextended both in stocks and in the property market. In a recession type environment I can see chaos if we keep cutting rates for the sake of keeping the bull market extended. When that bull kicks back, a lot of recent property owners will default with their 500k+ mortgages that they secured on 3.xx interest. It looks like we don't learn our lesson do we.

[BlackPeter]

Incredibly silly to have shaved the .50 percentage off the interest rate and even worse imo if they are planning more rate cuts. I thought the policy statement was to keep inflation at a mid point of 2%, which it was at (1.9%) at the last figure released. GDP is tracking along well too so its not a growth concern.

The capital markets are grossly overextended both in stocks and in the property market. In a recession type environment I can see chaos if we keep cutting rates for the sake of keeping the bull market extended. When that bull kicks back, a lot of recent property owners will default with their 500k+ mortgages that they secured on 3.xx interest. It looks like we don't learn our lesson do we.

The RB is really sitting between a rock and a hard place. Not shaving the interest rate would have meant a higher NZ$ and an additional problem for our exports. Lets face it - if the US and Australia go down, there is no point for NZ to swim against the tide - like it or not.

Doubt as well that interest rates will go up anytime soon - no big economy in the world could take that and so no RB would want to be the first to kill off their economy. But yes, it might be an interesting discussion how this current bull will end. I am however pretty sure that if it does, the woes of the house owners not being able to pay their mortgages might be our smallest problem. Think crashing state pension, private pension schemes, banks and large countries not able to honor their debts anymore (unless the interest rate stays negative). But all this probably belongs onto the black thread ...

Good news is - we are not there yet ;);

[Beagle]

ANZ picks OCR to keep falling - three more cuts by May
"We now expect 25 basis point OCR cuts in November, February and May, taking the OCR to 0.25 per cent," ANZ chief economist Sharon Zollner wrote in research released this morning.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12265366


no wonder people are scrambling to get ther income stocks .... why they last

I'd be surprised if it went that low but 0.5% next year is on the cards I reckon.
Some high yielding shares have been overlooked in the rush to get yield. The gentailiers probably have even more room to run as the insatiable overseas and local demand for really safe yield looks likely to remain robust for the foreseeable future. I see more value in the overlooked high yield sector.

[winner69]

Need another poll — NZX50 by Christmas — 12,000 or 13,000 or 14,000 or whatever

Last poll we had I think about 8,000 was the most popular

I can’t do polls - anybody up to it

[Beagle]

https://www.sharetrader.co.nz/showthread.php?11603-What-will-the-NZX50-be-in-Christmas-2019
There you go mate.

[Jay]

Speaking of yields, Birmaboy,s (I think it was) dividend yield site still not back up and running???

[bull....]

the chinese have launched there assault on the NZ banking market.

China Construction Bank launches a 3.19% mortgage rate for fixed terms on one, two and three years, easily the market leading offers for any home loan

https://www.interest.co.nz/personal-finance/101620/china-construction-bank-launches-319-mortgage-rate-fixed-terms-one-two-and

actually i think the only way other banks will be able to match this is with some form of term deposit rate cut although i see they are raising funds vis bonds at very low 1%- 2% odd so a combo?

[bull....]

The launch of market leading home loan rates by subsidiaries of China's main banks signals a more active role in retail banking here. We profile the institutions

https://www.interest.co.nz/banking/101690/launch-market-leading-home-loan-rates-subsidiaries-chinas-main-banks-signals-more


after the banking sector now , probably good timing when new rbnz capital requirements come in add to the t/o of dairy industry as well and they are becoming well positioned.

[bull....]

Reserve Bank says low interest rates 'an opportunity'
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12271333

orr probably feels like hes talking to a brick wall lol needs to relize politicians dont have vision or much common sense.

[SailorRob]

Does anyone know why the quoted PE ratio of the smartshares NZX 50 fund (NZX FNZ) is only 7? I though the PE of the fund should roughly match the PE of the index which must be far higher than that. Also on the topic does anyone know the mechanics of the NZX 50 PE ratio as commonly quoted, i.e. how is it calculated?

Thanksin advance :)

[blackcap]

Does anyone know why the quoted PE ratio of the smartshares NZX 50 fund (NZX FNZ) is only 7? I though the PE of the fund should roughly match the PE of the index which must be far higher than that. Also on the topic does anyone know the mechanics of the NZX 50 PE ratio as commonly quoted, i.e. how is it calculated?

Thanksin advance :)

I think I have the answer. Looking at their financial statements i see they made 43.07 cents per share. On a share price of about $3.00 that is a PE of 6.96.
Hope that makes sense.

Note: Dividend earnings make up 28% of earnings. The remainder is in a category called "Net changes in fair value of financial assets at fair value through profit or losss".

https://smartshares.co.nz/document-library/financial-statements-smartshares-exchange-traded-funds.pdf

page 324 if you don't want to go for a long scroll.

[SailorRob]

Thanks blackcap, I agree this seems right but that would then imply that the overall PE ration of the NZX 50 index was only 7 which it's supposed to be more like 24... I'm missing something.

[Tronald Dump]

Thanks blackcap, I agree this seems right but that would then imply that the overall PE ration of the NZX 50 index was only 7 which it's supposed to be more like 24... I'm missing something.

The PE of the market is the average of the PEs of all the companies in the index. The PE of FNZ is not the average PE of the underlying shares in the portfolio, it's calculated as described above. Hope that makes sense.

[blackcap]

Thanks blackcap, I agree this seems right but that would then imply that the overall PE ration of the NZX 50 index was only 7 which it's supposed to be more like 24... I'm missing something.

You are missing the fact that this is a fund and has different accounting treatments than the underlying assets it holds. Read the financial statements and you will see what the differences are. This fund makes profit but the profits from the underlying assets it holds are not paid directly to the fund. The fund only receives dividends but an accounting construct called "net changes in fair value... etc" make up a huge portion of their earnings. This portion is also untaxed. I am presuming these earnings relate to share price changes in underlying assets. So for example if ATM goes from $5.00 to $10.00 and they hold a lot of them that will boost their profit hugely and thus also give them a very small PE. Although the ATM PE is very high. Hope that helps. And if not go over the financials in the link provided.

Answers are in the notes, particularly Note 2.

[BlackPeter]

Thanks blackcap, I agree this seems right but that would then imply that the overall PE ration of the NZX 50 index was only 7 which it's supposed to be more like 24... I'm missing something.

As blackcap explained, they do capture capital gains (of their assets) as well as earnings of their assets and call it all "earnings".

If you own a share yourself, than you still might be pleased about any capital gain, but it would not be part of the earnings for this particular stock and it would not go into the PE calculation.

You are comparing apples with fruit baskets.

[SailorRob]

Guys, I have now got it! Thank-you very much makes complete sense now. I read somewhere that a good way to get an idea of a overall index PE was to look at the ratio of a fund that tracks it, and this may well be the case in the states but not with Smartshares.

Cheers

[voltage]

I am still confused with this. Simplicity and Smartshares offer NZ top 50 funds. Simplicity has a management fee of 0.1% cf 0.5% for smart shares. But the funds use different indices. Smartshares use the portfolio index which limits any company to 5% of total holding. Which would you recommend?

[blackcap]

I am still confused with this. Simplicity and Smartshares offer NZ top 50 funds. Simplicity has a management fee of 0.1% cf 0.5% for smart shares. But the funds use different indices. Smartshares use the portfolio index which limits any company to 5% of total holding. Which would you recommend?

It all depends on your risk profile and what you the investor want. You cannot say one is better than the other (fees excluded). NZ50 from smartshares will be more concentrated to lower cap stocks whilst the Simplicity one will have a greater range in its stocks. If you want accurate reflection of the index then the Simplicity one is for you. If you want the bigger stocks capped (meaning smaller stocks will be overweight) then the NZ50 from Smartshares is for you.

[sb9]

https://www.interest.co.nz/business/101922/latest-nzier-quarterly-survey-business-opinion-suggests-gdp-could-fall-below-1-later

With this and appalling business confidence numbers y'day, most likely another cut by RBNZ in Nov.

[Tronald Dump]

It all depends on your risk profile and what you the investor want. You cannot say one is better than the other (fees excluded). NZ50 from smartshares will be more concentrated to lower cap stocks whilst the Simplicity one will have a greater range in its stocks. If you want accurate reflection of the index then the Simplicity one is for you. If you want the bigger stocks capped (meaning smaller stocks will be overweight) then the NZ50 from Smartshares is for you.

The Portfolio Index has outperformed the NZX 50 Gross over the last 1, 3, 5 and 10 years with lower volatility. This is probably because it has a higher weighting to mid/small cap due to limiting the largest stocks to a 5% weight.

[bull....]

Aussie interest rates: Reserve Bank cuts OCR to 0.75%
And the cuts are expected to keep coming from Reserve Bank governor Philip Lowe, with another reduction predicted this year and again at the beginning of 2020.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12272740


keep the pressure on the RBNZ to keep dropping ocr rates and banks to follow with lower mortgage rates and deposit rate cuts.

[bull....]

just out

Kiwibank predicts 0.5% OCR cut
Kiwibank economists believe the Reserve Bank will cut the Official Cash Rate to just 0.5%, with the possibility of a major cut in November.
https://www.goodreturns.co.nz/article/976515673/kiwibank-predicts-0-5-ocr-cut.html

[winner69]

just out

Kiwibank predicts 0.5% OCR cut
Kiwibank economists believe the Reserve Bank will cut the Official Cash Rate to just 0.5%, with the possibility of a major cut in November.
https://www.goodreturns.co.nz/article/976515673/kiwibank-predicts-0-5-ocr-cut.html

Recent cuts have had little impact eh ....why have more

But then bank economists are gaming the system with ulterior motives and hoping Orr will play along.

[bull....]

Recent cuts have had little impact eh ....why have more

But then bank economists are gaming the system with ulterior motives and hoping Orr will play along.

catch 22 for some of it if you dont cut and your neighbours cuts your exchange rate will make you uncompetitive.

anyway asb predicting the same too

DEEPENING BUSINESS GLOOM LIKELY TO PUSH ANNUAL GDP BELOW 1%
ASB Bank chief economist Nick Tuffley says the survey flags the risk that the economy lost further momentum in the September quarter and "with inflation indicators also softening, the need for further stimulus is greater" and increased his expectations for official cash rate cuts."We now expect a further 50 basis points in total of OCR cuts, 25bp in November and now 25bp in February, taking the OCR to a fresh record low of 0.5 percent," Tuffley says.

http://www.sharechat.co.nz/article/85ff7d1a/deepening-business-gloom-likely-to-push-annual-gdp-below-1.html

those gentailers look pretty good

[dobby41]

catch 22 for some of it if you dont cut and your neighbours cuts your exchange rate will make you uncompetitive.

We were above Aussie for some time before to little effect.
Big cuts seem to sppok the punters - they think more must be wrong than is so stop spending.

[bull....]

We were above Aussie for some time before to little effect.
Big cuts seem to sppok the punters - they think more must be wrong than is so stop spending.

too true , but what you do when caught in a catch 22. anyway hope they direct credit everyone money to spend instead of doing QE with bonds

[dobby41]

too true , but what you do when caught in a catch 22. anyway hope they direct credit everyone money to spend instead of doing QE with bonds

Well they waited a long time before matching the Aussies before.

[bull....]

Simplicity declares war with 2.95% mortgage
https://www.goodreturns.co.nz/article/976515683/simplicity-declares-war-with-2-95-mortgage.html


the chinese banks and now simplicity , the pressure is going on the aussie banks to drop mortgage rates under 3% which means if they do lower deposit rates will have to come.

[dobby41]

Simplicity declares war with 2.95% mortgage
https://www.goodreturns.co.nz/article/976515683/simplicity-declares-war-with-2-95-mortgage.html


the chinese banks and now simplicity , the pressure is going on the aussie banks to drop mortgage rates under 3% which means if they do lower deposit rates will have to come.

With $50mil it isn't much of a 'war'.
More like a skirmish or even a playground scrap.

[bull....]

With $50mil it isn't much of a 'war'.
More like a skirmish or even a playground scrap.

just the start from what i read , and using it to supplement there declining income from term deposits.

[sb9]

Afternoon trading seem to bring bargain hunters on board across various stocks.

[SailorRob]

Anyone have any insight or opinion as to the effect of all time low bond yields/OCR on the PE of the NZSX50?

Thanks in advance.

[BlackPeter]

Anyone have any insight or opinion as to the effect of all time low bond yields/OCR on the PE of the NZSX50?

Thanks in advance.

I guess at face value pretty obvious. OCR down means PE will go up, given that money will keep flowing from low interest accounts into stocks.

Obviously - this is only true as long as nothing terrible happens on the share market (which might be just one Twitter message away).

[couta1]

Afternoon trading seem to bring bargain hunters on board across various stocks. Lol, what bargains excepting A2.

[winner69]

I guess at face value pretty obvious. OCR down means PE will go up, given that money will keep flowing from low interest accounts into stocks.

Obviously - this is only true as long as nothing terrible happens on the share market (which might be just one Twitter message away).

PE going gangbusters ....while forecast EPS keeps declining

[SailorRob]

I guess at face value pretty obvious. OCR down means PE will go up, given that money will keep flowing from low interest accounts into stocks.

Obviously - this is only true as long as nothing terrible happens on the share market (which might be just one Twitter message away).

Yes that much is obvious but any ideas on what an OCA cut in half should do to what was before a 'average PE multiple', it's hard to compare current PE with past because the baseline is shifting so far. The current PE of the index is historically high but how much can we discount due to the much lower risk free rate?

[BlackPeter]

Yes that much is obvious but any ideas on what an OCA cut in half should do to what was before a 'average PE multiple', it's hard to compare current PE with past because the baseline is shifting so far. The current PE of the index is historically high but how much can we discount due to the much lower risk free rate?

Well, yes it happens to be a cut in half ... but I don't think this is relevant in this context. And don't forget - OCR can turn negative - how are you then taking your ratios?

If your current PE is say 35 (which means basically 2.9% "interest") and the OCR goes down by 0.5%, than it might be fair to assume that the expectation in companies earnings potential also go down by 0.5% - i.e. 2.4%, which would mean a PE of 42 (all rounded);

Obviously - there are many other uncorrelated factors impacting on PE.
As well - don't forget - at some stage will the "house of cards" crash down. We just don't know, when ...

[SailorRob]

Thanks BlackPeter. The 2.9% interest includes what companies must retain for all manner of reasons too and even considering that it's still comparative to a term deposit. So from here companies earnings must rise significantly to justify current prices (which doesn't seem likely). So can we conclude that even considering record low OCR the valuations are very high? I think current PE is around 24 so if 1 year forward is predicted at 33 that means falling earnings.

As buffet says, any investment is worth all the cash you’re going to get out between now and judgment day discounted back. The discounting back is affected by current interest rates. So the lower the interest rate the higher the value of a cash stream from shares.

[bull....]

Anyone have any insight or opinion as to the effect of all time low bond yields/OCR on the PE of the NZSX50?

Thanks in advance.

the biggest impact is on valuations of companies with defensive characteristics ( those with more reliable income streams) eg utilities , consumer staples , real estate. In this environment good reliable income means the valuations of companies with this will increase as the discount rate declines. nzx pe on average is high ( on past metrics , or could be considered low on current valuations using a lower discount rate) because a large portion of the market has defensive type stocks. if rates stay low for a long time share prices of these companies will stay what some people call elevated for a long time or some people might push them even higher as they still consider them cheap on ever declining discount rate based on income streams. if rates increase one day obviously the reverse will occur and these stocks may decline due to discount rate increasing. black swan events mean everything declines. at the end of the day with the market it depends how you value a stock to what you think its worth there is no golden rule.

[winner69]

One thing with interest rates going lower is expected returns from most asset classes (including equities) go lower as well

Low interest rates is a sign economies are struggling - company profits struggling etc etc - and equity prices have been bid up

[SailorRob]

Great insight, thanks bull....

[bull....]

One thing with interest rates going lower is expected returns from most asset classes (including equities) go lower as well

Low interest rates is a sign economies are struggling - company profits struggling etc etc - and equity prices have been bid up

fair point about most stocks except those with reliable income streams. as we dont know exactly what the future of world growth is maybe we should assume a possibility of a low growth low rate environment? therefore eps of companies will hardly grow but hardly decline either? so many possibilities eh maybe why defensives are so sought after at the moment.

[winner69]

You’d think something’s got to give

Forward EPS for NZX is 4% ...not much is it with such a high relative PE to the rest of the world

[SailorRob]

You’d think something’s got to give

Forward EPS for NZX is 4% ...not much is it with such a high relative PE to the rest of the world


Doesn't that chart you attached say negative 4% Winner?

Yes it does seem we are an outlier, I've been doing some research on this index P/E ratio (not sure if that chart is for the top 50 index or the whole). There are some outliers with large market caps that skew the ratio up significantly due to large amounts of CAPEX which are now bleeding off earnings but not cash-flow so much. As well as companies like infratil with it's huge PE.

I've tried to rationalise the high PE by comparing it to P/Free cash flow but it's not easy for an index.

[Beagle]

You’d think something’s got to give

Forward EPS for NZX is 4% ...not much is it with such a high relative PE to the rest of the world

This is a subject that nobody seems to want to talk about. For my money some of the large blue chip Gentaiilers like MEL, GNE and CEN, (hold all), are trading on cash flow yield and are bond proxies and that's fine. Elsewhere many parts of the market with very modest growth are trading on PE's in the 30's and late 20's and are overpriced in my opinion. I would include in there many infrastructure and other companies with a well defined moat like POA, AIA, FPH and so on that really are trading at extremely stretched multiples.
I stay away from companies on the NZX that are overpriced for their growth. I will be exercising a very large position in Barrmundi warrants later this month because I believe the Australian market is fundamentally much better value than the NZX.

[bull....]

This is a subject that nobody seems to want to talk about. For my money some of the large blue chip Gentaiilers like MEL, GNE and CEN, (hold all), are trading on cash flow yield and are bond proxies and that's fine. Elsewhere many parts of the market with very modest growth are trading on PE's in the 30's and late 20's and are overpriced in my opinion. I would include in there many infrastructure and other companies with a well defined moat like POA, AIA, FPH and so on that really are trading at extremely stretched multiples.
I stay away from companies on the NZX that are overpriced for their growth. I will be exercising a very large position in Barrmundi warrants later this month because I believe the Australian market is fundamentally much better value than the NZX.

we seem to be in agreement again about valuations of gentailers being fair if based on cashflows not pe

[SailorRob]

This is a subject that nobody seems to want to talk about. For my money some of the large blue chip Gentaiilers like MEL, GNE and CEN, (hold all), are trading on cash flow yield and are bond proxies and that's fine. Elsewhere many parts of the market with very modest growth are trading on PE's in the 30's and late 20's and are overpriced in my opinion. I would include in there many infrastructure and other companies with a well defined moat like POA, AIA, FPH and so on that really are trading at extremely stretched multiples.
I stay away from companies on the NZX that are overpriced for their growth. I will be exercising a very large position in Barrmundi warrants later this month because I believe the Australian market is fundamentally much better value than the NZX.

Yes agreed, I wonder why the NZX is so stretched compared to the other markets which are suffering from the same issues of lower returns on fixed income etc, after all this is a global issue.

Not that I wish to coattail the Beagle but how does one buy warrants on the ASX or even NZX for that matter?

[waikare]

Yes agreed, I wonder why the NZX is so stretched compared to the other markets which are suffering from the same issues of lower returns on fixed income etc, after all this is a global issue.

Not that I wish to coattail the Beagle but how does one buy warrants on the ASX or even NZX for that matter?

BRM warrants (BRMWE) can be brought on the NZX up to the Wed 23rd Oct, final exercise date is 25th Oct

[Beagle]

Yes agreed, I wonder why the NZX is so stretched compared to the other markets which are suffering from the same issues of lower returns on fixed income etc, after all this is a global issue.
Not that I wish to coattail the Beagle but how does one buy warrants on the ASX or even NZX for that matter?
NZX is one of the highest yielding markets in the world. I guess its also seen as relatively politically stable too.

BRM warrants (BRMWE) can be brought on the NZX up to the Wed 23rd Oct, final exercise date is 25th Oct
Correct and final exercise price is 59 cents per warrant. At the last traded price of 3.4 cents, this gives warrant buyers entry into BRM shares at 62.4 cps, last traded price 64 cents and last reported NTA per share 71.55 cps. With movements in the ASX since last Wednesday I estimate the current NTA at about 72.5 cps so an entry at 62.4 cps is a very good delta to the NTA and a 1.6 cent difference to the share price.

I would buy more but for the fact that I have well and truly backed up the truck already.

[SailorRob]

NZX is one of the highest yielding markets in the world. I guess its also seen as relatively politically stable too.

Correct and final exercise price is 59 cents per warrant. At the last traded price of 3.4 cents, this gives warrant buyers entry into BRM shares at 62.4 cps, last traded price 64 cents and last reported NTA per share 71.55 cps. With movements in the ASX since last Wednesday I estimate the current NTA at about 72.5 cps so an entry at 62.4 cps is a very good delta to the NTA and a 1.6 cent difference to the share price.

I would buy more but for the fact that I have well and truly backed up the truck already.

Thanks Beagle, I'd never heard of them... Could you explain why on their own website their charts show their share price essentially flat for the last decade but when you look up NZX BRM on google for example it shows a very different trend with giant step changes upwards every now and then?

[Beagle]

Dividends will likely be the reason and BRM pays out huge ones. I hold for the reasons expressed in posts #649, (read whole post including the requote of the one I made earlier) and #652 https://www.sharetrader.co.nz/showthread.php?4071-Barramundi-(-BRM-)&p=774420#post774420

There's probably not a lot of growth prospects here but the yield is tremendous and the value (both discount to NTA and the overall value proposition of the ASX relative to the NZX), gives encouragement to invest and diversify across the Tasman as well.

For me its about the exceptional yield. I can't change who I am and that's a dividend hound at heart :)
Heaps more about the company here https://barramundi.co.nz/

[SailorRob]

Great, yes I had just found that thread, will read both as you suggest. Thanks for the advice.

[Beagle]

https://www.goodreturns.co.nz/article/976515714/three-themes-a-top-fund-manager-is-watching-closely.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+15+Oct+ 2019

Top fund manager recommends being overweight Australasian equities. I thin k the ASX on a forward PE variously reported as being about 17 is good value for where the 10 year Govt bond rates are now (about 1%).

[Baa_Baa]

https://www.goodreturns.co.nz/article/976515714/three-themes-a-top-fund-manager-is-watching-closely.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+15+Oct+ 2019

Top fund manager recommends being overweight Australasian equities. I thin k the ASX on a forward PE variously reported as being about 17 is good value for where the 10 year Govt bond rates are now (about 1%).

Sure has/is a great long term ride, so long that there might be a few punters who’ve never experienced a decent reversal. The longer in the tooth are probably pretty clued up about getting out or riding it out and accumulating , Or getting back in when things improve. The queue at the exit when this turns to custard will be epic. I think the opportunity presented by a gut wrenching rout is becoming more appealing than chasing yields in an over priced and over extended market. I have no insights about when however, morseso just being prepared for what seems inevitable.

[Beagle]

For my money I won't buy excessively priced shares. If one concentrates on quality companies on reasonable multiples that's a lot more attractive than bonds or cash.
I refuse to pay excessive PE multiplies for moderate growth so avoid stocks that many other people think are a great bet like RYM, ATM, FPH, POT, AIA to name just five.
On the other hand if one is buying stocks like HGH with growth on a forward PE of about 12, SUM with strong growth on a forward PE of 13 to name just 2, with 10 year Govt stock at just 1% it would be a real stretch to say either of those stocks is overvalued. I think value investors will do much better when the market eventually corrects, whichever year that may be ?

Its all very well to be a prophet of doom but how are you going to get a return on your money while you wait and wait and wait, perhaps for many, many, many more years for the big correction you're looking for ? What's your strategy ?

[winner69]

CPI higher than expected and bank economists / commentators continue to talk up the need for more OCR rates next month ....and Orr will fall for it.

[greater fool]

Junk removed.

[bull....]

term deposits plummeting

This week BNZ, Kiwibank and Rabobank have cut term deposit rates

https://www.interest.co.nz/personal-finance/102179/week-bnz-kiwibank-and-rabobank-have-cut-term-deposit-rates-and-3-offer-only

[bull....]

With the loss by the all blacks last night i think a rate cut in november must be a near certainty dont you think. the link between big sporting effects and the depressive feeling following a loss in a major sporting event usually leads to a decline in economic gdp in the near term.

[winner69]

With the loss by the all blacks last night i think a rate cut in november must be a near certainty dont you think. the link between big sporting effects and the depressive feeling following a loss in a major sporting event usually leads to a decline in economic gdp in the near term.

ABs losing is what Jacinda and Grant meant by ‘global headwinds’

[Balance]

ABs losing is what Jacinda and Grant meant by ‘global headwinds’

And true to form, not a word yet from the hijab* wearing hypocritical one regarding the ABs loss to England.

compare and contrast how quickly she tried to insert herself into the win against Ireland last week - https://www.stuff.co.nz/sport/rugby/rugby-world-cup/rwc-2019-japan/116722541/all-blacks-v-ireland-prime-minister-jacinda-ardern-supports-jack-goodhues-mullet

"After the All Blacks' 46-14 thrashing of Ireland in the quarterfinal, Prime Minister Jacinda Ardern weighed in on mullet-gate, throwing her support behind the contentious hairstyle. "And that's a brilliant win ... for the All Blacks and mullets everywhere," she wrote on Instagram with a photo of Goodhue after the game."

As you wrote elsewhere, W69 - she probably will state that the ABs were playing as Independents :t_down: after her highly tax-payer paid PR team have mulled the implications through.

* Hijab - symbol of oppression of females in many Muslim countries

[Snoopy]

ABs losing is what Jacinda and Grant meant by ‘global headwinds’


The wobbles of last week from the Tiwai smelter bomb thrown into the NZX, and particularly the power companies is only the beginning. Tuesday will be the day of the 'Kieren Reid Krash' on the NZX50, with up to all the years gains being wiped out. Not only has the rugby world cup gone, the entire NZ economy will be wrecked. And if that correlation between high milk prices and RWC success is to be maintained, a portent of doom has been fired off to our dairy farmers as well. Forget playing any more. Kieren Reid would be advised to stay in Japan and become a Buddhist monk IMO. It is probably his only hope of salvation.

SNOOPY

[troyvdh]

Hey snoopy why not tell us how you really feel.

[bull....]

is it true that the All Blacks losing a World Cup means the end of a government?
There has been some research done on this, most notably by Reserve Bank Governor Adrian Orr (https://www.stuff.co.nz/business/opinion-analysis/99997896/adrian-orr-is-about-to-make-nz-central-banking-a-whole-lot-more-fun) in 1996 when he was a merely a jobbing National Bank economist.

https://www.stuff.co.nz/national/politics/116975657/is-the-all-blacks-loss-a-death-knock-for-labour

[Blue Skies]

is it true that the All Blacks losing a World Cup means the end of a government?
There has been some research done on this, most notably by Reserve Bank Governor Adrian Orr (https://www.stuff.co.nz/business/opinion-analysis/99997896/adrian-orr-is-about-to-make-nz-central-banking-a-whole-lot-more-fun) in 1996 when he was a merely a jobbing National Bank economist.

https://www.stuff.co.nz/national/politics/116975657/is-the-all-blacks-loss-a-death-knock-for-labour


Hopefully the countries grown up a bit since then. Ahh...perhaps not. Nat's might be the only ones (secretly) feeling cheerful this morning. :)

[bull....]

very good article on the immigration rort ongoing in NZ

The dirty little secret in New Zealand's migration debatehttps://www.stuff.co.nz/business/opinion-analysis/117318375/the-dirty-little-secret-in-new-zealands-migration-debate

[artemis]

NZX50 hits a record, and I wonder how much is due to inflows of freed up cash from landlords selling up.

[mcdongle]

christmas rally?

[dobby41]

NZX50 hits a record, and I wonder how much is due to inflows of freed up cash from landlords selling up.

Most landlords I know are scared of shares.

[artemis]

Most landlords I know are scared of shares.

Some, sure. Property investors selling up may well have 6 or 7 figures and will likely find an adviser if uncertain. Some of the tax free gains will find their way into shares one way or another and the sums could be significant.

[winner69]

christmas rally?

...that’s still to come

Good eh

[dobby41]

Some, sure. Property investors selling up may well have 6 or 7 figures and will likely find an adviser if uncertain. Some of the tax free gains will find their way into shares one way or another and the sums could be significant.

Some could - certainly this one will be putting 7 figures into shares shortly but I'm not scared of stocks and never have been.
The refrain I most hear from property investors is around 1987 - very long memories these people.
I, too, remember 1987 but I learnt from the experiance.

[bull....]

important events in december for NZ

1.Government promises boost to economy and job creation for youth with infrastructure cash injection
The full size of the package and projects involved would be revealed on December 11 at the half yearly economic and fiscal update (HYEFU).

lets hope its really is transformational to take advantage of low interest rates.

heres a good story piece on what politicians normally do

Asia's long-term planning is paying off; New Zealand must learn from it
OPINION: As much as I love New Zealand, I have often felt exasperated that it is the most short-term country I have lived in, and I have lived in a few

https://www.stuff.co.nz/business/117850262/asias-longterm-planning-is-paying-off-new-zealand-must-learn-from-it


2. Final auckland port review is considered by cabinet in december

3.The Reserve Bank will release the final decisions in its biggest ever review of banks' regulatory capital requirements on Thursday, December 5

https://www.interest.co.nz/banking/102516/reserve-bank-will-release-final-decisions-its-biggest-ever-review-banks-regulatory

[Beagle]

Good info, thanks bull. Long running fuel study is also released on Thursday 5th December.

[stoploss]

Good info, thanks bull. Long running fuel study is also released on Thursday 5th December.

Big day 5th Dec and this could arguably be the big one.

https://www.rbnz.govt.nz/regulation-and-supervision/banks/consultations-and-policy-initiatives/active-policy-development/review-of-the-capital-adequacy-framework-registered-banks

Sorry see this has been posted above.

[couta1]

Good info, thanks bull. Long running fuel study is also released on Thursday 5th December. Fuel study equals non event.

[Beagle]

Fuel study equals non event.

Jacinda Ardern started her election campaign yesterday with the $400m bribe for schools. http://www.sharechat.co.nz/article/e68cbfbd/opinion-labour-s-timely-bribe.html and as you can see I'm not the only one thinking that's the start of the lolly scramble and bribery
We'll see. I'll bet you a cider next time we catch up that she gets back on her hobby horse of motorists are being "fleeced" again.

[SailorRob]

NZX50 Capital index (not gross with dividends reinvested) is the index to compare against other markets, is up around 45% since the peak in 2007. Anyone have information on earnings then or even P/E. Wondering if the 45% rise is mainly just due to elevated P/E?

[justakiwi]

So she should because we are.


.... that she gets back on her hobby horse of motorists are being "fleeced" again.

[Beagle]

So she should because we are.

I agree 100% we are being fleeced. Do you think its the fuel companies (the only one we have complete data on is ZEL who after all costs net's 3-4 cents per liter)...or could it be the Govt who tax us about $1 per liter all up including GST. Which do you think is the more plausible possibility based on those numbers...

[dobby41]

Jacinda Ardern started her election campaign yesterday with the $400m bribe for schools. http://www.sharechat.co.nz/article/e68cbfbd/opinion-labour-s-timely-bribe.html and as you can see I'm not the only one thinking that's the start of the lolly scramble and bribery
We'll see. I'll bet you a cider next time we catch up that she gets back on her hobby horse of motorists are being "fleeced" again.
So everyone says that the Govt should spend some money on infrastructure to seed the economy while money is cheap and when they do that it is labelled.
Some people are hard to please.

[justakiwi]

It is both. Govt tax is too high in my opinion, but having said that, both Labour and National have been guilty of this.

What bugs the hell out of me is the variation in fuel prices from location to location. Why should I pay 20c/litre more in Timaru, than someone in Christchurch? it’s bull**** and it’s the fuel companies controlling that.


I agree 100% we are being fleeced. Do you think its the fuel companies (the only one we have complete data on is ZEL who after all costs net's 3-4 cents per liter)...or could it be the Govt who tax us about $1 per liter all up including GST. Which do you think is the more plausible possibility based on those numbers...

[RTM]

So everyone says that the Govt should spend some money on infrastructure to seed the economy while money is cheap and when they do that it is labelled.
Some people are hard to please.

Correct Dobby...she just couldn't win on this one. No spending on infrastructure and people from Reserve Bank down get stuck into them. And if she spends she faces the wrath of the Beagle's.
Between a rock and a hard place.

[Beagle]

Correct Dobby...she just couldn't win on this one. No spending on infrastructure and people from Reserve Bank down get stuck into them. And if she spends she faces the wrath of the Beagle's.
Between a rock and a hard place.

LOL..slow day on the market eh, doubt she can hear the barking. Good on her with some spending on infrastructure even if the timing is quite a "coincidence". I think its clear to all intelligent people who's really "fleecing" us on fuel costs.

[bull....]

important events in december for NZ

1.Government promises boost to economy and job creation for youth with infrastructure cash injection


The full size of the package and projects involved would be revealed on December 11 at the half yearly economic and fiscal update (HYEFU).

lets hope its really is transformational to take advantage of low interest rates.

heres a good story piece on what politicians normally do

Asia's long-term planning is paying off; New Zealand must learn from it


OPINION: As much as I love New Zealand, I have often felt exasperated that it is the most short-term country I have lived in, and I have lived in a few

https://www.stuff.co.nz/business/117850262/asias-longterm-planning-is-paying-off-new-zealand-must-learn-from-it


2. Final auckland port review is considered by cabinet in december

3.The Reserve Bank will release the final decisions in its biggest ever review of banks' regulatory capital requirements on Thursday, December 5

https://www.interest.co.nz/banking/102516/reserve-bank-will-release-final-decisions-its-biggest-ever-review-banks-regulatory


review of key announcements

govt announced 12billion infrastructure spend , but gave no idea on what or when lol so will have no impact at all on economy next year. might in the future if any of it actually gets done.
RBNZ capital released and increased limits on banks. so will add marginally to growth slowdown in future not next year i reckon.
Port review announced and other than words nothing really announced except more reviews

So of all the big announcements in december the only one that achieved an outcome was the RBNZ the govt involved ones seem to follow the trend of words but nothing more.

[bull....]

Australia Cuts Forecasts for Wage Increases, Economic Growth and Budget Surplus

https://www.bloomberg.com/news/articles/2019-12-15/australia-budget-struggles-to-keep-defying-gravity-amid-slowdown?srnd=premium-asia

[bull....]

market hitting new all time highs now after consolidating for last 2 mths . breaking out of small range implying a 400 pt move from the breakout