Harbour Outlook: Escalating trade tensions impact markets
Key market movements
Global equities were sharply lower in unhedged New Zealand dollar terms in March, with the MSCI All Country World Index (ACWI) declining 5.0%. With the NZD strengthening against the USD, returns in hedged terms were -4.5% for the month.
Locally, the New Zealand equity market continued its poor start to the year with the S&P/NZX 50 Gross Index (including imputation credits) down 2.4% in March. Australian...
Harbour Navigator: Liberation Day signals a painful transition
The US has announced a more aggressive than expected increase in import tariffs, which incorporates a reciprocal tariff programme with a minimum 10% on all countries, including Australia and New Zealand.
If tariffs are maintained at these newly announced levels, we expect them to lower already-decelerating US GDP growth and increase inflation pressures. Global growth is likely to fall as a result of this US weakness and as e...
Harbour Navigator: Retirement village shares – Refreshed?
Article originally published 24th March 2025 by the NBR
Shares in retirement village operators including Oceania Healthcare, Ryman Healthcare and Summerset have delivered diverse return outcomes for investors over the last year. While Oceania and Summerset have outperformed the broad S&P/NZX50 share market benchmark index Ryman has underperformed as it has gone through a corporate and financial reset. After delivering great o...
Harbour Navigator: NZ out of recession but risks remain skewed to lower rates
NZ is now technically out of recession and most forecasters expect ongoing above-trend growth this year without stimulatory monetary policy, i.e. an OCR below 3%. We are sceptical and see risks skewed to NZ needing sub-3%, or at least a much longer period of neutral, interest rates given the historically large amount of spare capacity.
There are of course several ways we could be wrong, including: the economy is stronger than ...
Harbour Navigator: Bankers say more volatility for the lucky country
Top bankers say the Australian economy may be lifting, but volatility from tariffs is likely.
Unquestionably strong bank capital to stay in Australia.
The February RBA rate cut might have made a positive difference for household sentiment, but business confidence is more attached to the global environment.
Australia is also grappling with low productivity and potentially needs to work out how to ensure bank lending finds its w...
Harbour Navigator: Don't look up! A new climate reality
Are we there yet?In 2024 the world spent a full 12 months above the 1.5°C warming threshold, in 2023 we spent close to a third of the year above 1.5°C. While technically not a breach of the long-term commitments made as part of the Paris Agreement, it does move the world closer to this scenario. The Copernicus Global Climate Highlights 2024[i] Report notes that, not only was 2024 the warmest year on record, the last 10 years a...
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Harbour Outlook: An inflection point to come for earnings?
Key market movements
Global equities were marginally positive in unhedged New Zealand dollar terms in February, with the MSCI All Country World Index (ACWI) increasing 0.3%. With the NZD losing previously made ground, returns in hedged terms were -0.8% for the month.
Locally, the New Zealand equity market continued to weaken with the S&P/NZX 50 Gross Index (including imputation credits) down 3.0% in February. Australian equiti...
Harbour Navigator: The pace of biotech commercialisation is accelerating
The growing importance of biotech companies has reflected the flood of lower cost equity and debt funding over the last 5-10 years together with large healthcare companies farming out some of the risk profile for developing new diagnostics and “drugs”. Whether this trend is sustainable will depend on how successful, and at what cost, new drugs and services can be delivered.
Artificial Intelligence offers considerable opportuni...
Harbour Outlook: A rebound amid uncertainty
Key market movements
Global equities rebounded in January. The MSCI All Country World Index (ACWI) increased 2.4% last month, in New Zealand dollar-unhedged terms. With the NZD strengthening through January, returns in hedged terms were 3.3% for the month.
Locally, the New Zealand equity market weakened with the S&P/NZX 50 Gross Index (including imputation credits) down 0.9% in January. In contrast, Australian equities had a c...
The Future of Clean Energy: Supercritical geothermal
Supercritical Geothermal: The future of clean energy?This is the first in a series of Harbour’s research on the energy transition. Our Navigators will explore New Zealand’s transition to a clean and reliable energy system by 2050.
We felt it best to start with a combination of controversy and innovation. The recent $60 million investment by the Government to explore the potential of supercritical geothermal highlights the lon...