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  1. #1
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    Default Potential adverse effects from coronavirus on NZ economy

    As observers of the NZX a study of the potential fallout on the NZ economy re current virus is probably warranted.
    What can we assume ?

  2. #2
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    An outbreak of Coronavirus in NZ would have a big affect on stocks such as AIR. Domestic travel is a big part of their business and it would ground flights and slow down everything.

    AIA would suffer ofcourse, ban of those from China and the controls in place.

  3. #3
    Dilettante
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    Obviously tourism and air travel will be badly affected if this drags out. The economy could potentially take a big hit from a severe slowdown in primary industries. We already have the logging industry on hold, crayfish sales have come to a grinding halt, salmon prices dropping around 20% so far and shipping of other produce into China (in particular) in jeopardy.
    If this drags out into and beyond Apil-May, our horticulture could also feel a big squeeze.

    Then you have all the donwstream effect for companies servicing these industries, such as freigh and port companies, engineering etc etc, not to mention employment insecurity.

    The potential for economic slowdown is quite significant and I would not be surprised to see the NZ$ take a big hit if this happens. So lets hope China{s very strong measures to contain it work quickly and well.
    Last edited by iceman; 07-02-2020 at 09:14 PM.

  4. #4
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    Maybe I should have omitted "adverse". Could there be any positives ?
    ie: upswing in imigration due to our isolation ?

  5. #5
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    Kiwisaver nest eggs in decline ... mine already taken a dip. Fortunately I am not retiring this year.

  6. #6
    Senior Member King1212's Avatar
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    Ports....Airport, ports as log not exported..cruise line ships not docking.

    Air Nz..of course....cancel heap of flight. Spoke with a mate just back from Dubai....his flight..emirate was postponed..3 days flights become one flight.

    hospitlity and tourism. Heaps of Chinese tours cancelled....supposed to be busy months here summer but tours were all cancelled including Korean, Japanese tours..and many overseas tourists are either canceled or postponed thier holidays..so will impacted restaurants...hotels...tourist attraction places such as Skycity.

    international students are cancelling or postpone their study here.....most of them are Chinese students..so will see heap of impact to local businesses.

    Exporter such as fonterra, scales, atm probably. As the buying power in china decreased due to unpaid leave....sickness or other priority. Part of china are still in lock down and people are buying via online delivery. But during crisis like this...foods are expensive so people will priority on staple foods.

    Forestry industry......helps of people are going to lose the jobs..as the oz logs are flooding the market....and china is not in productive stage.

    so..interesting time ahead for Nz...we are really too dependent to china. ALot of kiwi dislike Chinese tourists or overseas students especially Asian ethnicity...but they forgot because of them....they still got a job....so let see in the next reporting season....around August 2020... the figures will say it!

    maybe retirement operators will do good..as old kiwis have money and need to be looked after no matter what

    good luck everyone...dangerous world u live in.
    Last edited by King1212; 07-02-2020 at 09:46 PM.

  7. #7
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    Retailers that sell imported products from China. $2 shops, KMart, Warehouse, clothing, funriture etc. Keeping in mind all the jobs these stores provide to local people will have a knock on effect if this goes on for any length of time.

    Luxury goods.

    Have already said this in another thread. I have a family member who works for a Cantab based trucking company and some employees were told today .... don't come Monday & to take forced annual leave. He has work but this week moved from taking logs to Lyttleton to transporting imported (South American) grain.
    Last edited by Southern_Belle; 07-02-2020 at 10:44 PM.

  8. #8
    Legend Balance's Avatar
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    https://www.stuff.co.nz/national/hea...or-new-zealand

    A good summary of the sectors already feeling the impact and what it could if the crisis drags longer - like the H1N1 outbreak which lasted over a year.

  9. #9
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    my wifes business is virtually shut down now due to issues on chinese ports
    bull
    One step ahead of the herd

  10. #10
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    Quote Originally Posted by bull.... View Post
    my wifes business is virtually shut down now due to issues on chinese ports
    This is going to be a major issue both here and in Australia .
    For any business with debt there is a real danger the Banks will react to reduce their risk.
    Personally last week I sold shares so I no longer have any debt including margin lending

  11. #11
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    How long to resume business as usual once the nuclear like fallout has settled and either the virus is contained and vaccinated against or gone global?

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    Quote Originally Posted by fish View Post
    This is going to be a major issue both here and in Australia .
    For any business with debt there is a real danger the Banks will react to reduce their risk.
    Personally last week I sold shares so I no longer have any debt including margin lending
    Me too. I've scrapped out all the dribs & drabs in my portfolio,paid off revolving credit.
    I have retained my 2 high conviction shares IFT & FPH with the understanding SP could be volatile short term but long term........
    With money in the bank time to kick back and partake in other things.
    Take care everyone,keep healthy & take time out to relax.
    Last edited by kiora; 08-02-2020 at 10:49 AM.

  13. #13
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    Quote Originally Posted by kiora View Post
    Me too. I've scrapped out all the dribs & drabs in my portfolio,paid off revolving credit.With money in the bank time to kick back and partake in other things.
    Take care everyone & take time out to relax.
    I have done the same a week ago. I must admit with most of my holding being A2, it was hard to see the shareprice go up this past week, but then any a2 holders will know of it's volitility at the best of times. Whatever happens, we are all going to learn a lot over the coming weeks.

  14. #14
    Legend Balance's Avatar
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    Quote Originally Posted by Timesurfer View Post
    How long to resume business as usual once the nuclear like fallout has settled and either the virus is contained and vaccinated against or gone global?
    A google search of 'how long will the coronavirus outbreak last' shows a number of articles from credible sources.

    This is the most recent one which is worth reading :

    https://www.straitstimes.com/singapo...h-toll-so-high

    "The virus will likely die down when the hot season hits China" - so looks like going to be another 4 months before the peak, unless a vaccine is developed fast enough.

    4 months of further economic disruptions are bound to flow through into the wider economy - the flow on effects of severe downturns already impacting on the travel, tourism, agriculture, forestry and education sectors.

    Watch for further lay-offs and cost-reduction measures to kick in over the next few weeks in NZ. We already know that is happening in the sectors mentioned above. The markets are yet to fully wake up to that reality in NZ.

    The greatest threat to the global economy is however man-make - over-reaction and panic. This is the big unknown.

    Meanwhile, this is the realistic scenario :

    "Flu still kills about 400 New Zealanders a year, but its doesn't cause widespread disruption to trade and travel.

    We have learnt to live with it.

    We may have to do the same with coronavirus."
    Last edited by Balance; 08-02-2020 at 10:40 AM.

  15. #15
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    Quote Originally Posted by Southern_Belle View Post
    I have done the same a week ago. I must admit with most of my holding being A2, it was hard to see the shareprice go up this past week, but then any a2 holders will know of it's volitility at the best of times. Whatever happens, we are all going to learn a lot over the coming weeks.
    I have sold NPH,and continue to hold ALF,GNE,HGH,MEL,PGW,SKL,SPK,TRA,and on unlisted PAZ and SYFT.
    Sold a small holding in Aussie, and surprised myself by buying a share in UK [first time for about 20 years.]
    Last edited by percy; 08-02-2020 at 11:05 AM.

  16. #16
    Doggedly sniffing out more food Beagle's Avatar
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    https://www.msn.com/en-nz/news/world...cid=spartanntp

    Sobering stuff in terms of predictions on the Australian economy. Its certainly food for thought in terms of its implications for the NZ economy.
    No butts, hold no mutts, (unless they're the furry variety).

  17. #17
    Legend Balance's Avatar
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    Quote Originally Posted by Beagle View Post
    https://www.msn.com/en-nz/news/world...cid=spartanntp

    Sobering stuff in terms of predictions on the Australian economy. Its certainly food for thought in terms of its implications for the NZ economy.
    Completely out of OZ shares and happy to maintain that position until June 2020.

  18. #18
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    Quote Originally Posted by Beagle View Post
    https://www.msn.com/en-nz/news/world...cid=spartanntp

    Sobering stuff in terms of predictions on the Australian economy. Its certainly food for thought in terms of its implications for the NZ economy.
    Will not be much different for NZ Have been trying to diversify my portfolio away from this region for several years, might have been a good decision, only shares I own in aus are COH AND CSL plus LICs oh and Invocare funerals that bought last week, just in case there lots of extra burials coming up.

    More worried about the aussie banks have most of my money in them (the NZ branches). Not sure if money safer in stocks, or banks right now, but right now the 3% term deposits they locked into suddenly not looking so bad
    Last edited by ratkin; 08-02-2020 at 11:15 AM.

  19. #19
    Doggedly sniffing out more food Beagle's Avatar
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    I have significantly reduced a lot of my investment positions including in Barramundi which is my sole Australian investment.
    I have no qualms whatsoever about taking a very conservative investment position for an (at this stage indeterminate) period of time.
    I think the effects on the global economy could be quite significant as they will be for the N.Z. and Australian economies and if I'm wrong I am happy to come out of this thing happy and healthy with much the same capital as when it started. 75% cash allocation now. Maybe its time for another picture to sum up my situation https://www.bing.com/images/search?v...t=0&vt=0&eim=1
    No butts, hold no mutts, (unless they're the furry variety).

  20. #20
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    Quote Originally Posted by Beagle View Post
    I have significantly reduced a lot of my investment positions including in Barramundi which is my sole Australian investment.
    I have no qualms whatsoever about taking a very conservative investment position for an (at this stage indeterminate) period of time.
    I think the effects on the global economy could be quite significant as they will be for the N.Z. and Australian economies and if I'm wrong I am happy to come out of this thing happy and healthy with much the same capital as when it started. 75% cash allocation now. Maybe its time for another picture to sum up my situation https://www.bing.com/images/search?v...t=0&vt=0&eim=1
    Are you concerned about the safety of your cash? I am a little, do not trust the banks to hold up

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