Harbour Navigator: Vertical SaaS is devouring software - and AI is hungry for the next bite
In 2011 Andreessen Horowitz, founder of a16z, famously said “software is eating the world”, making the prediction that, over the next decade, the world would see many industries be disrupted by software. Perhaps some of the more prominent examples were how Netflix gutted Blockbuster and the suicide of Borders as it handed over its online business to Amazon under the theory that online book sales were unimportant.
Today, softw...
Harbour Investment Outlook: Waiting game
Key market movements
The MSCI All Country World Index (ACWI) increased 4.5% last month, in New Zealand dollar-unhedged terms. However, the strength was due entirely to NZD weakness with returns in NZD-hedged terms, coming in at -1.1% for October.
Locally, New Zealand equity market returns picked up after a couple of flat months, with the S&P/NZX 50 Gross Index (including imputation credits) increasing 1.7%. The S&P/ASX 200 Ind...
Harbour Navigator: I see red, I see red, I see red: Adapting to Trump policy uncertainty
A Trump victory and likely Republican congressional sweep could signal major shifts in US economic policy, such as tax and tariffs.
Markets had partly leaned into a Trump win, with many strategists previously picking a Republican clean sweep as a 30-40% chance.
However, the immediate reaction of markets suggests a further possible movement of asset prices as bond yields factor in potentially higher US inflation, larger US defi...
Harbour Navigator: Don't be disappointed by dividend illusions
Investors may be paying too much for short term dividend income illusions.
Paying dividends from capital rather than recurring earnings is not sustainable over time
One-off asset sales might better be paid out as special dividends or returned to shareholders as share buy backs
Investors must exercise caution when evaluating companies offering seemingly attractive dividends. A high current yield may mask underlying issues that ...
Harbour Navigator: Responsible Investment in the mainstream - it's no side hustle
The climate transition is driven increasingly by the economics as technology takes over, says Dr Rod Carr
More than $1bn a day globally is needed for climate transition and adaptation over the next thirty years and the private sector has a pivotal role to play
FMA focusing on greenwashing given the uptake by consumers
Modern Slavery and Nature are likely the next frontiers of responsible investing.
The recent RIAA Aotearoa New...
Harbour Navigator: How an easing process is felt by different households
The RBNZ has started its easing cycle and markets expect much more, taking the OCR to 3% in one year’s time.
Lower interest rates should boost economic activity, while higher council rates and insurance costs are likely to provide an offsetting force.
Household experiences of lower interest rates will differ greatly, depending on respective financial situations. We think those with debt are likely to benefit most from a cas...
Harbour Investment Outlook: Surprise stimulus
Key market movements
The MSCI All Country World Index (ACWI) edged 0.6% higher last month, in New Zealand dollar-unhedged terms. Returns in NZD-hedged terms were much better for a second month due to continued NZD strength, coming in at 1.9% for September.
Locally, New Zealand equity market returns for the month were again muted after strong returns in July, with the S&P/NZX 50 Gross Index (including imputation credits) flat. ...
Harbour Navigator: Beijing gets serious: fiscal and monetary stimuli to boost Chinese growth
The Politburo and PBOC have signalled a strong commitment to rebooting the economy, with a range of monetary and fiscal measures, though the size of the stimulus is unlikely to match the scale of a decade ago.
Market reactions to China's recent announcements indicate an expectation that stimulus measures will meaningfully impact economic growth in the short-term.
While some analysts are optimistic about short-term growth, ot...
Harbour Navigator: RBNZ unlikely to accelerate easing
Following last month’s RBNZ rate cut, financial markets have moved to price an accelerated easing cycle, inconsistent with the central bank’s latest OCR forecast and largely driven by lower US rates.
Recent New Zealand economic data don’t support current market pricing with Q2 GDP contracting less than the RBNZ had forecast and soft data showing improvement in response to lower interest rates.
Don’t get us wrong, things...
Harbour Navigator: What does equity market concentration really tell us?
Recently one of the world’s largest companies posted earnings. Nvidia has been more than just a market darling, it has epitomised the concentration of stocks in the global equity index. Rising from a fraction of a percent, Nvidia now stands at over 6% of the S&P 500 index which is comprised of larger capitalisation US stocks. Collectively the top ten stocks account for some 37% of that market, when a decade ago the top ten sto...
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