Is a Bear Market starting to play out on the NZX ?

[bull....]

lmao can't even trade on ASB. What a useless interface.

seem to have a lot of issues these days dont they must not be investing anything in the business?

[couta1]

lmao can't even trade on ASB. What a useless interface.

DB having problems also coping with the volume but apparently the NZX is also at fault, the systems are outdated for modern trading.

[Beagle]

The only saving grace for the markets could be the low interest rates, once the dust has settled people are going to be looking for yield, and the more the prices fall the better the yields look.

Valuations are still stretched P/E will look even more stretched when E falls for most companies, but if there are stocks that can keep churning the dividends out until matters improve then they should become sought after.

The 25% falls will probably only happen if the virus is here, and everybody stays indoors not spending for Three months.
Another 10% and I will be sniffing around for some safe yield plays

That's the problem. The metrics of the market was already really stretched and if E starts falling...especially on a 3 month lockdown you'll get your 25% alright...and some more I reckon.

It's not that it's a virus or WW3. What is relevant is its a black swan and that is all this market needed to push it over the edge. The market was a problem waiting to happen and it just got its cue.

Average market PE of the NZX was over 30 at 12000 points. This is absurdly higher than the long run average of somewhere around 18 according to some commentators.

In a bad scenario where there is a lockdown for many months the market could halve to 6000 and still be on a forward PE of 20+ because average earnings will come down so much. On the other hand the chances of a rebound and the NZX50 going to 13,000 later in 2020 look extremely remote to me.

[ratkin]

lmao can't even trade on ASB. What a useless interface.

When I was selling everything on Tuesday morning there were terrible delays with trades going throug. Even on market trades were taking Ten minutes to be verified. I suspected I was being held back in the queue while their bigger favoured clients were being given preferential treatment as it was a very heavy selling day.

Rang them and was assured it was just down to higher than normal volumes, seemed a little odd though, because the little sales of 1 share that the bots do were going through straight away. Most days my sells go through almost instantly.

Makes me wonder what would happen in a real crash, the delays would cost thousands

[ratkin]

That's the problem. The metrics of the market was already really stretched and if E starts falling...especially on a 3 month lockdown you'll get your 25% alright...and some more I reckon.

Average market PE of the NZX was over 30 at 12000 points. This is absurdly higher than the long run average of somewhere around 18 according to some commentators.

In a bad scenario where there is a lockdown for many months the market could halve to 6000 and still be on a forward PE of 20+ because average earnings will come down so much. On the other hand the chances of a rebound and the NZX50 going to 13,000 later in 2020 look extremely remote to me.

P/Es have been ridiculous for years. Remember when the NZ market was cheap back in the 90s-early 2000s when many companies were trading on P/Es under 10 and even the super growth stocks were considered expensive if they went over 20 P/E.

Some of the ones now are on P/E of 60. Which implies they would need to lose more than half their value to be a fair price in a bear market.

Again low interest rates have an influence though, which is why we will probably not see those sort of drops.


I think there could be a quick rebound to all this, the public will be hanging out for some shopping/spending/partying once this virus is out the way. Cancelled holidays will be rebooked and we will all feel lucky to be alive.

[Joshuatree]

Beware, there could well be sucker rally though.

[Cadalac123]

There is 100% a sucker rally, and what's going to happen is the smart big boys are going to re-enter after everyone pulls out and drops the SP to ridiculous entry prices.

If you think the coronovirus will stop the world functioning you have honestly lived your life in a small little bubble and have no idea what type of medical diseases there are out there

[Logen Ninefingers]

ASB Securities is a disgrace. Trades have been taking ages this weeks. Now the whole system is dead, can't see portfolio, can't make trades. F*cked.

With all the brokerage they make off us, how can they treat customers like this????

[Logen Ninefingers]

Are we able to sue ASB securities for a complete and utter f-up like this? A reckon a class action is in order.

[Joshuatree]

A sucker rally is actually when the Instos etc talk it up and sell off the rest of the shares they want to get rid of to small retail suckers.