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  1. #1411
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    According to the analysts is this share currently starting to look like a bargain: Consensus SP is $7.66 and Buy Recommendation is a strong "HOLD" (5.9/10). But before we get too excited - how good have the analysts been in the past in the art of predicting the future?

    In February 2019 the AIA share price peaked at $7.77. At that stage the combined mental power of 9 share market analysts forecasted that over the 12 months to February 2020 the AIA share price will drop by 17% to $6.46 (consensus). Obviously - we could argue that these wise men predicted already the current market crash, and just got the drop a bit early, but in that case did they predict the market crash for AIA already for a long time.

    AIA actually peaked in February 2020 at $8.75, i.e. the actual share price was 35% above the consensus and SP moved into the opposite direction from the forecast (rise instead of drop) - i.e. analyst forecast is a clear FAIL.

    Looking into the consensus buy recommendation - it was in February 2019 "UNDERPERFORM" (3.9/10) - i.e. analysts said that the share will underperform the NZX. NZX 50 went up by 21% and AIA went up by 13%. That's 8 % lower than the NZX performance and in the contet of this exercise a PASS.

    I am doing this exercise as well with other NZX listed stocks - the overview is here:
    https://www.sharetrader.co.nz/showth...arket-analysts

    20 stock forecasts checked so far (checking for each consensus and buy recommendation);
    Consensus share price forecasts correct: 4/20; analysts hitrate: 20%
    Consensus recommendation vs NZX50 correct: 7/20; analysts hitrate: 35%

    Based on this performance it might be questionable whether we want to trust the 'experts' with the current Buy recommendation.
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

  2. #1412
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    This is very sad to see https://www.nzherald.co.nz/business/...ectid=12319973
    I think now is exactly the right time to use some of the Government's money that they are pouring into the economy to get a move on and build the 2nd runway at AIA. When is there a better time than now when there are hardly any planes or other traffic there and the Government wants to ensure ongoing employment ? This is critical infrastructure that should be built right now

  3. #1413
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    Quote Originally Posted by iceman View Post
    This is very sad to see https://www.nzherald.co.nz/business/...ectid=12319973
    I think now is exactly the right time to use some of the Government's money that they are pouring into the economy to get a move on and build the 2nd runway at AIA. When is there a better time than now when there are hardly any planes or other traffic there and the Government wants to ensure ongoing employment ? This is critical infrastructure that should be built right now
    Postponing the second runway and new hotel etc is the right thing to do. Repairing the main runway should be priority whilst movements are reduced.

    There will be a recession, which would affect numbers travelling anyway. After a protracted period of travelling restrictions, consumer preferences may shift. Even after the epidemic subsides, There will likely be apprehension related to prolonged flights after so many diseased travellers were infected whilst travelling and then arrived back into NZ. The long-term effect on passenger air travel is unknown at this stage.
    Last edited by Bjauck; 26-03-2020 at 09:55 AM.

  4. #1414
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    Quote Originally Posted by Bjauck View Post
    Postponing the second runway and new hotel etc is the right thing to do. Repairing the main runway should be priority whilst movements are reduced.

    There will be a recession, which would affect numbers travelling anyway. After a protracted period of travelling restrictions, consumer preferences may shift. Even after the epidemic subsides, There will likely be apprehension related to prolonged flights after so many diseased travellers were infected whilst travelling and then arrived back into NZ. The long-term effect on passenger air travel is unknown at this stage.
    The main runway obviously needs to be repaired, COVID or no COVID. That's a safety issue and it should have not gotten to this stage. Disagree about the 2nd runway. Time to lift much of NZ's pathetic infrastructure to a much higher level.

  5. #1415
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    Quote Originally Posted by iceman View Post
    The main runway obviously needs to be repaired, COVID or no COVID. That's a safety issue and it should have not gotten to this stage. Disagree about the 2nd runway. Time to lift much of NZ's pathetic infrastructure to a much higher level.
    If only. Unfortunately, construction activity is incompatible with the intent of the lockdown, i.e. to reduce contact within the wider community for a period of time. Incidentally, completion of Transmission Gully highway has also been halted, again. And if ever infrastructure was needed, this piece is!

  6. #1416
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    Although not specifically mentioned, I've heard from my contacts this halt on capex projects will extend to the ZQN airport also.

  7. #1417
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    Quote Originally Posted by iceman View Post
    The main runway obviously needs to be repaired, COVID or no COVID. That's a safety issue and it should have not gotten to this stage. Disagree about the 2nd runway. Time to lift much of NZ's pathetic infrastructure to a much higher level.
    They referred only to suspension not cancellation. Why build something to the same previous timetable if it may not be needed after all or if the need for may be delayed by some years.

    Similarly for roads, a good thing to come out of the action taken to combat the epidemic may be that many more people work and are educated from home, resulting in less peak time demand on the road network. Let’s hope there will less need to bulldoze roads through town and country.

  8. #1418
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    Incidentally, completion of Transmission Gully highway has also been halted, again. And if ever infrastructure was needed, this piece is!
    I thought it was a bit quiet at home, thanks, now I know why! And I agree, it was a very much needed road.

  9. #1419
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    Very positive news from AIA. The global travel industry is not going to ramp up to previous levels for a very long time so why commit billions at such a time on uncertainty.

    People normally book flight well in advance and people will not even be thinking about travel until this is over. By then there may be far fewer travel agents and airlines, fewer tourist attractions the works. It will be well into 2021 maybe even later before we are back to normal levels.

  10. #1420
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    Quote Originally Posted by Valiant View Post
    Although not specifically mentioned, I've heard from my contacts this halt on capex projects will extend to the ZQN airport also.
    And hopefully Wanaka!!

  11. #1421
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    Quote Originally Posted by ratkin View Post
    Very positive news from AIA. The global travel industry is not going to ramp up to previous levels for a very long time so why commit billions at such a time on uncertainty.

    People normally book flight well in advance and people will not even be thinking about travel until this is over. By then there may be far fewer travel agents and airlines, fewer tourist attractions the works. It will be well into 2021 maybe even later before we are back to normal levels.
    I'm a bit surprised that the price has bounced back by as much as it has.

    Do people really think that NZs borders are going to reopen in 4 weeks time? IMHO we will almost certainly drop from alert level 4 to 3 but the borders will remain closed weeks or months longer. It makes no sense to go into lockdown and get it under control (i.e. stop the community transmission) then to reopen the borders and invite another surge of cases.

    How long can AIA last without additional funding or government support if the shutdown continues longer than 4 weeks is the question i am asking?

  12. #1422
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    Quote Originally Posted by Baddarcy View Post

    How long can AIA last without additional funding or government support if the shutdown continues longer than 4 weeks is the question i am asking?
    Have a look at their annual report and see how strong their balance sheet is. That will give you an indication. What are their fixed costs like? Can they lay off staff and survive on limited revenue? What kind of reserves do they have?

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